PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
The complex saw see-saw trade near the unchanged mark today, ending higher, with a halt to Libyan oil exports out of 3 ports and mixed but mostly higher trade in US shares supporting, whereas an uptick in the US dollar index and losses in European shares may have helped cap gains. The Ifo Survey in Germany was a disappointment, with a miss in the overall business climate index, and weaker than expected readings in both the current conditions and future expectations components. Germany's DAX dropped 1.7% lower today, the CAC 40 in France was not far behind with a 1.6% drop, and the FTSE 100 in the UK fell 0.8%. Also unsupportive, the US dollar index was up 0.12% as of this writing. While the Dow was down 0.4%, however, the S&P 500 was up 0.1% and the Nasdaq had gained 0.3%. Also supportive was news on the supply side today, as Reuters reports that the Petroleum Facilities Guard in Libya has halted exports out of the Hariga, Es Sider, and Ras Lanuf ports over a pay dispute.
ULSD Forward Curves Distillate Stocks
NATURAL GAS | WEATHER | INVENTORIES
Natural gas futures broke a four-session losing streak, strengthening today amid supportive shifts to the temperature outlook and a tighter expected US market balance this week. Refinitiv analysts raised their total US demand forecast for this week by 4.1bcf/d to 128.4bcf/d, while raising their supply forecast by just 0.1bcf/d to 99.9bcf/d, implying larger withdrawals from storage of 28.5bcf/d. The latest 1-5 day outlook from the ECMWF sees below-normal temperatures in the Midwest and in much of the Northeast outside of Maine. The market is seen loosening back up next week, however, with demand falling by 5.6bcf/d to 122.8bcf/d, even as supply declines by 0.4bcf/d to average 99.5bcf/d. The ECMWF sees above-normal temperatures in the Midwest but still below-normal temperatures in the Northeast in the 6-10 day period. For the next two weeks overall, the Global Forecast System raised its Heating Degree Day forecast by 17 to 423, closer to the 30-year average of 442 and well above last year's 367 HDDs. Next-day natural gas prices in the cash market were mixed, with Henry Hub prices down 4 cents to $2.45/mmBtu, Transco Zone 6 prices in New York off 5 cents to $2.45/mmBtu, but with Algonquin citygate prices jumping $1.98 higher to $5.60/mmBtu.
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
NYMEX ULSD futures rose 1.1% in an inside session today (higher low, but also a lower high) with very average volume. Slow stochastics are threatening to cross in neutral territory, but we'll stay on the sidelines for now, awaiting further developments. We continue to see nearby resistance at the 9-day ma ($1.5975), which held up to a test at the highs today, followed by the recent $1.6235 high, while $1.5000 and then $1.45000 are our nearby support levels. RBOB futures added 0.8% in an upside session today, consistent with our neutral/bullish stance, which we maintain. We did not quite match the recent $1.5756 today, and this remains nearby resistance with $1.6000 after that, while the 18-day ma ($1.4987) and then $1.3899 are seen offering nearby support. Slow stochastics, candlesticks, and the major averages all point higher - but the RSI is overbought. WTI trade today looked more like ULSD futures, as we added 1.% but in an upside session and with nearby 9-day ma resistance holding up to a test. We continue to see resistance at this 9-day ma ($52.93), followed by $53.93, while $50.54 and then $45.27 are expected to offer support. We remain neutral. Natural gas futures gapped higher over the weekend, causing slow stochastics to cross for a buy signal just inside of oversold territory. The RSI (49.5) is much more neutral, however, and so are the MACD and major averages. Still, today's move was quite inconsistent with our downside bias, and we fall back to the sidelines. We still look to the 100-day ma ($2.643) and then to $2.769 for resistance, with support seen at $2.403 and then $2.247.