Written Commentary
CRUDE OIL
The upward charge in crude oil prices was initially extended overnight, but it would appear as if prices reached a temporary overbought condition into the highs this morning. We suspect that prices were lifted by news that Libyan oil output has declined from a port strike, but that positive supply news is largely offset by a sharp drop in 2020 Spanish crude oil import data and from news that Indian January fuel and diesel sales declined.
The gasoline market has underperformed relative to the rest of the energy complex to start the trading week. Perhaps the market was undermined as-a-result of news that US gasoline imports from Europe have jumped to a 2-month high, but also because weekly US imports last week doubled the rate seen at the beginning of the month.
NATURAL GAS
In retrospect, the bull camp in natural gas should view the Monday and early Tuesday action as very disappointing as significant below zero temperature readings in a large portion of the US has failed to stimulate a wave of buying. In fact, reports that US temperatures last week were 8 degrees below normal and projections of -14 degrees in Chicago this weekend, prices should have extended on the upside.
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