Written Commentary
CRUDE OIL
While the crude oil contract rejected the overnight 6-day low, chart damage was forged and suspicion toward the bull case is extended. However, it would appear as if a global risk on mentality is in place to start the new trading week, and that should partially offset energy demand disappointment from the slack Chinese PMI reading overnight.
With the RBOB market on-fire last week that presents a significantly overbought technical condition to the trade this week. However, given the aggressive reversal of 8 cents from the Friday high into the early low today, some of that overbought condition was balanced.
NATURAL GAS
The natural gas market bounced last week in a move that seems to have been partly the result of long-term international demand hopes and from a slight increase in heating demand. Unfortunately for the bull camp, last week’s storage report posted the smallest draw since the beginning of the North American winter and the surplus versus the 5-year average jumped back up to +9.3%.
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