Written Commentary
CRUDE OIL
While crude oil has shown amazing bullish resiliency since the December spike low, the trend should be tested in today’s session with OPEC plus expected to vote to increase production ahead. However, last month OPEC production rose by only 50,000 barrels per day, mostly because of significant losses in output by Libya, minor losses in Angola and a collection of small losses in the Congo, Equatorial Guinea, and Gabon.
While March gasoline respected the previous day’s contract high throughout most of the Tuesday session, and the market remains near contract highs to start today, the charts continue to show a loss of upside momentum. It should be noted that March gasoline forged the largest trading range of the recent consolidation yesterday and rejected a 4 day low aggressively providing the bull camp with some fresh technical confidence.
NATURAL GAS
The natural gas market has ranged up sharply and reached the highest price since early November this morning despite news that Russian gas flows showed improvement. According to Bloomberg, grid data shows fuel deliveries into Slovakia have returned to normal and that bearish news is joined by a warmer European temperature forecast for next week and evidence of increased German wind power. However, reports of a cyber-attack on the European energy distribution system have prompted speculation that Russia is behind the attacks to increase their power against the West.
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