Written Commentary
CRUDE OIL
A 2nd day of sharp downward action early today is not surprising after a very significant $6.60 gain into the highs yesterday from last week’s lows. While technical analysis will label this week’s action as a possible blowoff top and key reversal formation, the energy complex has shown amazing resiliency for most of this year.
A significant correction is in process which is not surprising considering that gasoline prices in 5 trading sessions increased by $0.27. As indicated already, Singapore weekly fuel stockpiles increased by 4.1%, but light distillates and middle distillates declined leaving the net impact of the report supportive to US product prices. With the gasoline market in a corrective posture this morning, demand signals from jobs front could be more important than usual.
NATURAL GAS
While natural gas forged a higher high/new contract high yesterday, the market recoiled sharply from that rally because of promises of large volumes of supply from Russia’s Putin. Apparently, the Russian president tried to calm global LNG price fears by comments that Russia could supply all the gas needed to Europe and Asia.
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