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Corrective Action in Petroleum to Extend


With a fresh lower low for the move early today negative supply-side news and demand fears the bear camp remains in control. Signs that state-run Chinese refineries have “shunned” oil trades with the Russians were discounted in the wake of the headline release of oil from the IEA and the US. Not surprisingly, the oil market came under aggressive liquidation yesterday in the face of news that the IEA was joining the US in a massive 120-million-barrel release of strategic oil supply. Another lesser pressure on oil prices came from news that Hungary agreed to buy oil from Russia in Rubles, as that allows some oil from Russia to flow into world supply.

The gasoline market also forged a fresh lower low for the move despite news that Singapore weekly fuel stocks fell 4% over the last week. Like the crude oil market, the gasoline market also fell out of bed yesterday under the weight of inside and outside market forces.


Apparently, very cold temperatures in the West Coast next week gave the natural gas market the impetus to forge fresh contract highs yesterday. However, with a massive spike up move rejected yesterday, the natural gas charts again give off the impression of a blow-off top. On the other hand, natural gas flow through the Yamal pipeline shifted from westerly to the east overnight, thereby adding credence to support on the charts at $6.00.

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