NATURAL GAS
While the natural gas market failed to initially show bullish sensitivity to reports of sabotage of a Finnish undersea pipeline, the market is showing bullish sensitivity because of news of an increase in US exports which reached an eight-month high. According to the Finnish government the pipeline under the Baltic Sea appears to have been damaged by a very significant outside force. However, it should be noted that the first undersea pipeline attack was mostly discounted with ultimate blame for the attack never fully established but Russia was obviously a top suspect. The natural gas market is clearly limited by a short-term overbought condition from five days of noted gains, by a jump in German wind power generation and by forecasts of a warm autumn pattern for Europe.
CRUDE OIL
RBOB gasoline yesterday stalled within Monday’s range up trade as if waiting is for fresh Chinese demand signals from the release of September Chinese new loan data. In fact, big picture macroeconomic data is likely to be a key driving force in gasoline today as macroeconomic optimism surfaced this week off the idea that the US Federal Reserve is poised to pause next month. For the US Fed to hold rates steady next month probably requires signs that core US PPI continues to moderate. Unfortunately for the bull camp, US gasoline stocks hold a large surplus to year ago levels and last week’s US implied gasoline demand fell off sharply.
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