Written Commentary
CRUDE OIL
On one hand, crude oil should be undermined this morning because energy demand fears arising from a disappointing Chinese manufacturing PMI reading. However, the declines this morning are minimal, and the markets have been aware of restricted industrial activity from energy shortages for at least 2 weeks. Unfortunately for the bull camp, a large increase in weekly EIA crude oil stocks from yesterday, removes a major bullish fundamental theme (tightening US crude oil stocks)! Other notable developments from the weekly EIA report yesterday were stock builds in all 3 major product categories and a significant narrowing of the year-over-year crude oil stock deficit.
NATURAL GAS
As indicated in crude oil coverage, analysts’ price projections for natural gas are escalating aggressively and may be temporarily getting ahead of reality.
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