PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
Petroleum futures continued higher today, with gains of over 1.5%, despite losses in US and European equities and strength in the US dollar index. In economic news, the US international trade in goods and services deficit came in at $74.4bn for March, wider than the $74.0bn consensus. US factory orders grew 1.1% last month, shy of forecasts at 1.3%. The Canadian merchandise trade deficit for the same month was C$1.14bn, while expectations called for a surplus of C$0.4bn. US stock market indexes were seeing losses from 0.4% (Dow) to 2.6% (Nasdaq), as of this writing. European shares closed in the red today with the FTSE 100 down 0.7%, the CAC 40 losing 0.9%, and the DAX dropping 2.5%. Also unsupportive for crude oil prices, the US dollar index was up 0.36% as of this writing.
NATURAL GAS | WEATHER | INVENTORIES
Natural gas futures settled unchanged today despite a stronger two-week degree day forecast and a slightly tighter US market balance expectation for next week. Refinitiv analysts now see total US supply of 97.5bcf/d outpacing US demand at 86.5bcf/d next week, implying slightly smaller injections of 11.0bcf/d (compared to yesterday’s forecast at 11.1bcf/d). The Global Forecast System raised its total degree day forecast from 148 to 152 for the next two weeks (79 HDDs and 73 CDDs), which is above the 30-year average of 142 TDDs but below last year’s 172 degree days over the same period. In the cash market today, prices at the Henry Hub benchmark rose by 10 cents to $2.96/mmBtu, Transco Zone 6 prices in New York jumped from $1.85 to $2.38/mmBtu and Algonquin citygate prices rallied from $1.65 to $2.95/mmBtu. The National Hurricane Center does not expect any Atlantic tropical cyclone activity over the next 48 hours. According to a Reuters poll of analysts, estimates for the weekly EIA petroleum inventory report for the week ended April 30 call for a 2.2mb draw from US crude stocks amid a 0.5 percentage point predicted increase in the nation’s refinery utilization rate. Distillate stocks are expected to fall by 1.0mb and gasoline stockpiles are expected to see a decrease of 0.6mb. API petroleum inventories for the same week are due this afternoon at 4:30.
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
Consistent with our directional bias, ULSD futures continued higher, gaining 2.4% and taking out both $1.9695 and $1.9868 resistance in the process. We saw a fresh multi-year high of $2.0012, which becomes nearby resistance - followed by $2.0462. Meanwhile, $1.9695 and then the 9-day ma ($1.9213) become nearby support. Slow stochastics look set to re-cross and become neutral, just south of overbought territory. The RSI is bullish and has a little bit of headroom, and major averages, candlesticks, and the MACD all point higher as well. We continue to favor upside chances for now. RBOB futures trade was also kind to our bullish bias, with futures taking out $2.1108 resistance and posting a 2.4% gain in an upside session. Slow stochastics are overcooked, but the RSI (66.8%) has room to rise yet. Meanwhile, the MACD, major averages, and candlesticks all point higher. We did not see a new multi-year high here, and we still look to the March high of $2.1700 for resistance, followed by $2.2000 for resistance, whereas $2.1108 and then the 18-day ma ($2.0303) are nearby support. WTI futures, where we also favored the upside, gained 1.9% today in an upside session. Indicators are similar to products. We continue to expect resistance at $66.85 and then $67.98, with support at $63.75, closely followed by the 9-day ma ($63.45). Lastly, we stuck with NG bulls yesterday and we did see a gain today, but a very marginal one at 10 points. Today's candlestick was a Doji star, signaling ambivalence, and slow stochastics and the RSI are both overbought. We'll take a neutral/bullish stance, seeing support at $2.898 and then $2.758, whereas $3.171 and $3.316 remain our nearby resistance levels.