PETROLEUM COMPLEX (WTI | BRENT | ULSD | RBOB)
Petroleum futures closed in the red today amid unsupportive US economic data releases and news that some European countries have suspended use of the AstraZeneca vaccine, despite gains in European shares and mostly higher trade in US equities. Reuters reported that some European countries, including Germany, France, Italy, Sweden, and Latvia, said they would suspend use of the AstraZeneca COVID-19 vaccine after reports of possible serious side effects. The World Health Organization has said that there is no established link between unusual blood disorders that some recipients of the AstraZeneca vaccine have developed and the vaccine. The European Medicines Agency is investigating these reports and findings are expected to be released on Thursday. In US economic news, retail sales fell 3.0% last month, missing the Econoday consensus calling for a 0.5% dip, while January sales were revised up from 5.3% to 7.6%. Also unsupportive, industrial production dropped 2.2% in February, while forecasts called for a 0.5% increase. The NAHB Housing Market Index came in at 82, below the 83 expectation. European stock markets closed higher today with the CAC 40 up 0.3%, the DAX adding 0.7%, and the FTSE 100 gaining 0.8%. As of this writing, US stock market indexes were trading mixed with the Dow down 0.3%, while the S&P 500 and the Nasdaq were seeing gains of 0.1% and 0.8%, respectively. The US dollar index was steady, as of this writing.
NATURAL GAS | WEATHER | INVENTORIES
Natural gas futures turned back north today amid a tighter US market balance expectation for next week, despite a weaker two-week heating degree day forecast and a moderating temperature outlook. Refinitiv analysts now see total US demand of 100.1bcf/d outpacing US supply at 98.7bcf/d next week, implying larger withdrawals of 1.4bcf/d. The Global Forecast System cut its heating degree day forecast for the next two weeks by 5 to 222, which is below both the 30-year average of 266 and last year's 241 HDDs over the same period. The latest 1-5 day outlook (EC) calls for near to below-normal temperatures in the Northeast, while above-normal temperatures are expected in the Midwest. The 6-10 day forecast is less supportive as above-normal temperatures are expected in both consuming regions. In the cash market today, prices at the Henry Hub benchmark fell from $2.65 to $2.58/mmBtu, Algonquin citygate prices dropped from $4.25 to $3.96/mmBtu, and Transco Zone 6 prices in New York weakened from $2.37 to $2.35/mmBtu. According to a Reuters poll of analysts, estimates for the weekly EIA petroleum inventory report for the week ended March 12 call for a 3.0mb build in US crude stocks despite a 5.4 percentage point predicted increase in the nation’s refinery utilization rate. Distillate stocks are expected to fall by 3.4mb and gasoline stockpiles are expected to drop by 3.0mb. API petroleum inventories for the same week are due this afternoon at 4:30.
ENERGY TECHNICALS (WTI | ULSD | RBOB | NG)
NYMEX HO futures lost ground in a thinly-traded downside session today, settling just north of nearby support at the 9-day ma ($1.9311). Although bears did not manage to take out nearby support, we do see a downward trend in candlesticks and the RSI is bearish as well. We fall back to the sidelines, seeing support $1.8330 after the 9-day ma, whereas $1.9695 and $2.0000 remain our nearby resistance levels. RBOB futures edged down 0.2% in a downside session, testing the 9-day ma ($2.0812) at the lows but settling in the top portion of the daily range. Slow stochastics and the RSI look heavy, and the MACD is set to cross from bullish to neutral. At the same time, RBOB bears made a weaker case today than did HO bears, and we'll remain neutral/bullish for a session longer, looking to $2.0000 and then the 18-day am ($1.9852) for support, with $2.1700 (recent high) and then $2.1904 resistance. WTI fell 0.9% in a downside session, with bears taking out the 9-day ma ($65.02) on a settlement basis, but we did not see nearby $63.75 support hit today, only threatened. Slow stochastics and the RSI are fairly neutral, as is the MACD, while candlesticks are trending weakly lower. We'll fall back to a neutral stance, still seeing support at $63.75 and then at $59.67, whereas $66.85 and $73.29 are expected to offer nearby resistance. Natural gas futures turned higher today, gaining 3.1% after a three-session drop. Slow stochastics are entering oversold territory, but the RSI cannot confirm. Meanwhile, the MACD is bearish and the major averages are weakening further. We'll stick to our downside bias for now, still looking to $2.403 and then $2.000 for support, while $2.758 and $2.898 are our nearby resistance levels.