Mixed Energy Outlook
While energy prices saw a flare ahead of the landfall of the hurricane it would not appear as if the “event” will be a force driving prices directly into higher high ground today. In another a fresh negative headline development the trade continues to see projections that Chinese buying will slow with their internal inventories rebuilt and now capable of supplying their growing economy. Certainly, the crude oil market should come away from this week with outside market underpin with the Fed indicating they will allow for more growth and inflation until US employment is perceived as “full employment”. Crude oil should also see some support from what appears to be a resumption of a major downtrend in the US dollar as that in turn should help to improve foreign demand for US oil supplies.
The action in the natural gas market continues to be very surprising, as we think lost production from offshore platform evacuations was marginal and there has been a disruption of exports because shipping conditions. However, it is possible that the demand side of the equation in natural gas has become the dominating force for the trade especially following news that the US Dollar is likely to fall further because of the Change in Fed policy.
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