Written Commentary
CRUDE OIL
A number of fundamentals have shifted bearish in the energy markets, with European crude storage last week jumping 5.8%, Middle East pricing into Asia increased (negative toward demand), backwardation possibly shifting into contango and talk that Saudi Arabia is seeing significant political pressure to relax production restraint to prevent prices from restraining global recovery.
The gasoline market has held up impressively against the crude oil dip and that is likely the result of a series of stories surfacing on improved gasoline demand.
NATURAL GAS
While the April natural gas contract forged a quasi-double low yesterday, there does not appear to be a definitive shift in fundamentals to expect prices to hold above this week’s initial lows. In fact, a slight cold temperature forecast into the weekend is of little significance as the market has entered the early portion of seasonal warming.
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