CRUDE OIL
With the punch out above $80 in November crude oil on Friday and a very significant upside thrust to start early today, the bull camp has extended control into a new trading week. In fact, it is very impressive for energy prices to have held firm in the face of a decidedly slack US nonfarm payroll result last Friday. However, seeing an energy crisis of sorts inside China has provided the bull camp with another theme besides the idea that recovering demand is outstripping recovering supply.
Like the crude oil market, the gasoline market also forged a new contract high overnight and has breached the next critical psychological resistance point of $2.40. At least at the end of last week, the gasoline market continued to see a flurry of increased traffic and congestion signals from high-frequency data.
NATURAL GAS
With wild swings in volatility seen in natural gas over the last two weeks and the injection season showing robust injections, the natural gas market looks vulnerable in the near term. Last week’s rig operating count showed US gas rigs drilling to be unchanged at 99. The gas drilling number has been unchanged for three weeks and is at the lowest level since July.
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