Written Commentary
CRUDE OIL
As of this writing, we favor the downward track in crude oil prices. Unfortunately, our views toward the crude oil market could be suddenly reversed or suddenly accentuated as OPEC plus has a meeting today. In looking back at this week’s action, the failure to sustain the early rally Monday/Tuesday in the face of trade talk that OPEC plus might rollover production restraint to the end of May is bearish.
The race between demand and supply in the gasoline market should reach a significant junction in the coming week with US product supply likely to begin to rise aggressively following a jump of 7.8% in the US refinery operating rate in just 3 weeks.
NATURAL GAS
In retrospect, the natural gas market fell back from a test of the 200-day moving average of $2.6880 earlier in the week and the market needs to respect consolidation low support at $2.56 to keep the charts from turning bearish again. Unfortunately for the bull camp, US electricity output declined 0.9% from a year earlier with output for the last 52 weeks showing a decline of 1.3% from the previous year’s data.
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