Written Commentary
ENERGY MARKET FUNDAMENTALS:
With the Crude Oil market forging another upside breakout this morning and doing so in the face of concerning US domestic problems and further US/China trade barrier action the bull camp appears to have a hidden well of buying capacity. Apparently the $35 level in July crude is not an equilibrium price as today’s upside breakout pushed prices above that key psychological level.
While the Gasoline market did not forge an upside breakout like crude oil this morning, it was pulled higher by the surprising pulse up in crude oil last week. However, we are highly suspicious of views that the rally Friday was built on less than feared incendiary commentary from the US President against China.
While the gas market was already moderately net spec short early last week and is clearly even more oversold this morning the charts still favor the bear camp to start the new trading week. Clearly the Natural Gas market does not see the prospect of a balancing of world gas supply and demand as is being seen in the petroleum complex.
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