Written Commentary
CRUDE OIL
Energy markets joined a wave of strength in physical commodities and equities with “risk on/demand hope” rallies yesterday and they appear to remain in that bullish posture early today in the face of a retrenchment in equity prices. Obviously, broad-based optimism flowing from significant gains in commodities and equities fostered waves of demand orientated buying throughout the week, but that bull theme is challenged by slack scheduled data and a US daily infection count of 86,057 on Wednesday.
Despite mixed views on road fuel demand (softer in Thailand, stronger in Spain), the September gasoline contract forged a new contract high yesterday and is holding near those highs again this morning. RBOB appears to be embracing the positives and discounting the negatives, with reports of demand returning to pre-Covid levels countervailing reports of pockets of very low road activity.
NATURAL GAS
After showing signs of a technical reversal earlier in the week, the natural gas bulls regained their footing and forged the 2nd highest close in the contract. While the shift in North American temperature scans was modestly in favor of a wider area of hot temperatures, the markets seemed to fully embrace that minor bullish shift.
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