Written Commentary
CRUDE OIL
With another spike up new high for the move overnight temporarily putting March crude oil prices above $62.00 the bull camp enters yet another trading session with an edge. Obviously, seeing API crude oil stocks yesterday afternoon decline by 5.8 million barrels provides fresh supply-side fodder for the bull camp. However, the Chinese have returned from holiday, US scheduled data yesterday prompted hope of a return of energy demand and disruptions of US production from the weather continue.
As opposed to the choppy two-sided action in crude oil in the Wednesday morning US trade, the gasoline market remained in a strong posture throughout the session. Clearly, US refinery shutdowns due to the weather have been larger than expected and could continue longer than expected.
NATURAL GAS
The natural gas market yesterday extended on the upside and approached 13-month highs in a reaction to extreme cold and production outages and many of those disruptions continue. In fact, certain portions of Texas have seen prices for electricity explode to unheard of levels (with contractual obligations requiring some buyers to pay up regardless) and the State of Texas has implemented restrictions on gas exports from the State.
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