Written Commentary
CRUDE OIL
Despite a measure of risk off sentiment in the US early trade, prices are supported as a result of reports of stronger spot demand in India, a four-week cold weather forecast for Germany, a decline in key Chinese port oil stockpiles (11 week lows) and from fresh talk of significant Chinese imports of light cycle oil. On the other hand, the markets remain on edge with respect to the threat against Indian energy demand ahead with estimates overnight indicating that consumption of fuel could decline by as much as 20% from new activity restrictions in the country.
NATURAL GAS
In retrospect, natural gas prices this week surprised the trade with very impressive gains on a limited amount of bullish information. Obviously, a couple week pattern of below normal temperatures in the US, combined with very cold Europe weather provided some late-season consumption which in turn brought down stocks into the beginning of the injection season.
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