Written Commentary
CRUDE OIL
While the December crude oil contract has not forged a new contract high today and the market has forged the longest sideways consolidation since early September the bias remains up. Furthermore, the sideways to lower action this week probably balanced overbought technical conditions from the breakneck gains in the first half of October.
The bull camp in the product markets should be disappointed in early price action today as the press is reporting Chinese stocks of gasoline and diesel have fallen to the lowest levels in a year. In fact, Chinese gasoline stocks declined by 2.3% on the week.
NATURAL GAS
We are surprised that natural gas prices are not moving sharply higher today given the flurry of news overnight pointing to panic style buying of gas globally and in particularly buying from China and Europe. However, US natural gas prices are diverging with surging international gas prices because the US holds supply and there are not concerns of extreme US shortages this winter.
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