Written Commentary
CRUDE OIL
The bias in energy prices to start today is pointing up off technical short covering from a 2-day high to low washout of $2.50, from a very definitive risk on environment flowing from global equities and from news that Chinese small independent refiners bought July and August cargoes. Other supportive developments for the market this morning are downward revisions to Libyan export projections for the month of May, a decline in Chinese Shandong port oil inventories and surprising interest from India’s largest refiner after a month long pause in purchases.
Not surprisingly, the gasoline market is showing less strength than crude oil and remains close to this week’s spike low and we attribute that to the ramping up of flow through the Colonial pipeline.
NATURAL GAS
All things considered, the strength in natural gas prices yesterday was impressive, as the weekly injection was at the upper end of the range of expectations. In fact, just ahead of the release of the EIA gas inventory readings, futures prices were under pressure and yet the market was not held back from retesting the vicinity of 11-week high pricing from the injection.
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