Written Commentary
CRUDE OIL
While the energy market was able to reject initial weakness yesterday and recover with a positive close, prices this morning have started out lower possibly undermined because of fears of a default by a massive Chinese real estate company. The latest lost production tally pegs the US loss at 26 million barrels of offshore production compared to some estimates earlier in the week of 30-million-barrels lost.
In retrospect, the gasoline market was clearly overdone from fundamental and technical perspectives into this week’s highs, but the market may have found solid support at the $2.10 level in the November RBOB contract.
NATURAL GAS
While the aggressive setback from this week’s highs yesterday undermines a portion of the bull camp into the early trade today, the gas market has been presented with several bullish overnight fundamental developments. In fact, US regulators indicated yesterday that 39% of the Gulf natural gas offshore production remained shuttered into Thursday’s trade and Russia’s largest gas company expects shortages of gas through the European winter and expects a series of new record highs in prices.
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