Written Commentary
CRUDE OIL
Despite a flurry of negative headlines overnight, July crude oil prices remain within proximity to 7-day highs and have respected even number support at $65.00. Obviously, the negatives include talk that OPEC plus might go ahead with a June production increase and consider delaying the scheduled July increase. In other words, it does not appear as if OPEC plus is concerned about Iran getting out from under sanctions quickly, despite suggestions from Iranian officials that they will soon get out from under the sanctions.
A shift from the action earlier in the week was seen on Wednesday with the gasoline market forging a 5-day high in the wake of crude oil struggling to remain near the prior day’s high. Furthermore, July gasoline prices overnight forged a 7-day high and managed that action in the wake of news that road traffic in Asia has softened.
NATURAL GAS
While we are surprised that natural gas prices were able to forge gains of $0.14 on a simple warm forecast for the middle of May, the net take away is that the market has become more sensitive to bullish items. However, the supportive weather forecast for Europe has turned milder for early June, but that negative forecast is partially offset by US temperature forecasts calling for much above normal temperatures throughout large portions of the Western US and the Northeast.
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