Hurricane Woes For Oil
The biggest threat from the looming hurricane is not from high winds, but instead is seen from the prospect of historic and sustained flooding around refineries.
The bull camp should be a little disappointed this morning in the early action in crude oil as hurricane Laura saw its landfall condition forecast raised to a category 4 storm. Furthermore, the bull camp should be disappointed in the early action given a larger than expected decline in API crude stocks, from further strength in equities and because of further signs of improvement in US/Chinese trade relations. In yet another bullish development the energy complex does not appear to be drafting support from, news that Brent crude oil today broke out above a 200-day moving average should have been seen as a sign that the longer term uptrend is reconfirmed.
With the natural gas market yesterday unable to make a higher high in the face of an upgrade in the strength of Tropical Storm Laura and the inability to breakout up today in the face of predictions that the storm could be the biggest threat to US energy since 2005, it is clear that prices have reached a possible high value area.
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