Written Commentary
CRUDE OIL
While this week’s EIA inventory data stoked the upward thrust in crude oil prices yesterday, the markets this morning are showing signs of exhaustion. Certainly, the key headline figure in the report was a 6.6-million-barrel decline in EIA crude oil stocks, but an awareness 46-week low in US crude oil stocks also added to the current market theme that global crude oil supplies continue to tighten.
The action in the gasoline market relative to crude oil over the last 2 1/2 days is very telling, as gasoline has diverged with the rest of the complex and prices this morning have failed technically at critical consolidation low support of $1.6470.
NATURAL GAS
In retrospect, the March natural gas contract appears to be locked within a range bound by $3.05 on the upside and $2.73 on the downside. However, despite a slight moderating of extremely cold temperatures at present in the US there is another significant drop in temperatures forecast for the weekend and that is combined with a Bloomberg story suggesting there is a 64% chance that US inventories will end the winter with supplies below the 5-year average.
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