Written Commentary
CRUDE OIL
In retrospect, there are a number of bearish forces that have combined to send oil prices down this week. In our opinion, the primary bearish force in the market is the idea that nuclear talks with Iran will likely lead to reduced sanctions and in turn will allow for higher Iranian oil exports. On the other hand, it is possible that this week’s high factored in a very large measure of demand improvement and recent US economic data has called the pace of the US recovery into question.
The charts in the gasoline market clearly favor the bear camp into the last trading session of the week.
NATURAL GAS
After being presented with a significant correction and a number of minor negative fundamental developments, it would appear as if fundamental and technical signals have shifted back in favor of the bull camp. The positive fundamental changes include predictions of a cold start to the month of June in Germany, record Chinese LNG imports from Australia in April and some views that yesterday’s injection was smaller than expected.
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