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Wild Volatility in Gas

CRUDE OIL

We are surprised that crude oil prices are not significantly lower to start today, as the markets are facing a risk off environment, there was further evidence of economic slowing posted overnight and most importantly there are reports that OPEC+ is considering “extending production above their pre-existing stepwise deal to incrementally raise production”.

While the gasoline market is experiencing headwinds from the weaker action in crude oil this morning, the market should be cushioned by news that Singapore fuel inventories reached a 2 year low because of the Asian “power shortage”.

NATURAL GAS

While the natural gas market forged a lower low and a lower high yesterday, the market aggressively rejected that washout and has forged a higher high early today. However, given the avalanche of favorable gas demand stories overnight (primarily from China ordering companies to aggressively seek winter feedstock supply) prices are in negative territory as of this writing.

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