Written Commentary
CRUDE OIL
The range down failure in crude oil prices overnight is clearly the result of rumors that there is a coordinated global effort underway to release strategic oil supplies. In fact, some press outlets are suggesting the Chinese are already “preparing” to release strategic supply. It should be noted that China has already released strategic oil this year and the decision to release oil in China is obviously much simpler than in the US.
While the January gasoline contract has managed to hold above a critical $2.20 level again this morning the market remains vulnerable from threats to release global strategic oil supplies. In a negative overnight development Singapore weekly fuel inventories increased by 2.4% with light distillates rising the most.
NATURAL GAS
The January natural gas contract yesterday saw the bottom fall out despite what appeared to be a big picture broad-based physical commodity market buying session. However, the markets appear to be growing more comfortable with the prospect of gas supply flowing from Russia (to Germany), particularly after the Russian stock market bid up shares of the national gas company following surging prices in Europe.
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