Written Commentary
CRUDE OIL
While fading the bull market in crude oil has been unwise over the past 6 months, the number of bearish headlines has increased of late. Overnight the International Energy Agency has poured cold water on the bull case with claims that the oil market super cycle is unlikely to extend because of “ample supply and ample stocks”.
With a 3-day high to low setback of nearly $0.085, open interest falling off significantly on the rally above $2.08 (May RBOB) and the prospect for a huge jump in the US refinery operating rate this week of 5%, the bear camp has gained a foothold.
NATURAL GAS
The natural gas market has forged very thin technical support around a double low of $2.5180 and the market might derive support from news of another weekly decline in global floating storage of LNG. On the other hand, the US temperature forecast favors the bear camp with warm temps on the East Coast and the production problems caused by the severe cold have now largely dissipated.
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