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While the path of least resistance remains down with the $1.50 level a very thin and unreliable support level, the bull camp appears to have caught a short covering lift off US weather. Certainly seeing the above average temperature region in the US expand from the Texas Panhandle diagonally through the heart of the country to the north of Maine until July 12th is supportive but that hot region is offset by below normal temperatures in the middle southeast and northwest. While the large range down washout last week likely factored in the larger than expected weekly injection last week, demand readings for natural gas continue to be unable to chew through the mountain of residual supply.


On one hand the crude oil market seems to have held up fairly well in the face of the rising US infection counts in the West with last week’s hard correction seemingly finding some support above $37.08. However with US infections continuing to grow and signs of lockdown building in certain areas, the threat of demand destruction in the US has returned again. While the news could be interpreted in a number of ways, Chinese small refiners cranked out a record amount of products last month, with a record amount of crude oil imported.

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