PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
The complex posted further gains today amid strength in global equities, despite strength in the US dollar index. Economic data out of the Eurozone were largely encouraging. The headline item - flash fourth quarter Eurozone GDP - came in at -0.7%, well above expectations calling for a 1.7% drop, following 12.4% growth the prior quarter. The DAX climbed 1.6% higher today and the CAC 40 rallied 1.9%. The FTSE 100, following disappointing UK home price data, lagged with a 0.8% gain. As of this writing, both the S&P 500 and the Nasdaq had gained 1.7% and the Dow was rallying 1.8%. The President and lawmakers are working towards another stimulus package, with Republicans a $618bn plan and Democrats proposing a $1.9tn plan. Whereas all this was supportive for crude, the US dollar index was up 0.25% as of this writing, and had hit levels not seen since December 2.
Curves and stocks for ULSD et al.
NATURAL GAS | WEATHER | INVENTORIES
Natural gas futures saw early strength, but trended steadily downwards as the session unfolded, despite supportive developments. The Global Forecast System sees 508 Heating Degree Days (HDDs) over the next two weeks, up fairly sharply from the previous forecast of 471 - and well above both the 388 HDDs seen last year and also the 424-HDD 30-year norm. Also supportive, and consistent with this revision, Refinitiv analysts raised their total US demand forecast for next week by 4.9 to 143.0bcf/d, while raising their total supply forecast by just 0.4 to 100.1bcf/d, implying large withdrawals from storage of 42.9bcf/d. The latest 6-10 day ECMWF forecast is very supportive, seeing temperatures 15 degrees or more below normal in the Midwest and for much of the central portion of the country. The 1-5 day outlook is less supportive, however, with mixed near-normal temperatures in the Midwest and above-normal temperatures for much of the Northeast. Still, there was a winter storm in the Northeast. Algonquin citygate prices shot up shot up $2.85 to $8.35/mmBtu, Transco Zone 6 prices in New York climbed $1.93 higher to $4.91/mmBtu, and benchmark Henry Hub prices rose by 20 cents to $2.88/mmBtu.
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
NYMEX ULSD futures extended their rally today, hitting a fresh high of $1.6896 in a heavily-traded upside session. As such, we side with the bulls - even though the RSI remains well into overbought territory. We see nearby resistance at today's high, followed by $1.7500, whereas the 9-day ma ($1.6111) and then $1.5000 remain nearby support. RBOB futures climbed 1.6% higher today in an upside session, also hitting a fresh multi-month high of $1.6411. Slow stochastics still look heavy, and the RSI is overcooked, while the MACD is neutral. Major averages and candlesticks point higher. As with HO, we feel forced to side with the bulls, seeing resistance at today's high ($1.6411) and then up at $1.6956, with 18-day ma ($1.5548) and then $1.4900 support. WTI futures also surprised with a 2.3% jump in an upside session, hitting a fresh high of $55.26. Slow stochastics are in fairly neutral territory, but the RSI is overbought here as well. Major averages and candlesticks point higher. We'll side with the bulls, seeing resistance at $55.58, followed by $59.67, whereas the 9-day ma ($52.94) and then $50.54 are seen offering nearby support. Lastly, things were looking grim for our neutral stance in NYMEX natural gas early on, as futures were climbing further, but we came off and settled near the bottom of the daily range, printing a shooting star (potential reversal pattern). We remain sidelined, still seeing $2.898 and then $3.171 resistance, with $2.758 and then $2.403 support.