Written Commentary
CRUDE OIL
While there could be a-number-of reasons for the significant surge/upside breakout in crude oil prices this morning, we suspect the primary force lifting prices is favorable Chinese PMI readings. However, the market should be drafting support from news yesterday that crude oil in floating storage declined by 17% last week, which in turn is the lowest tally since February.
While the gasoline market has not forged a fresh contract high, it sits just under the key psychological level of $2.20 and appears to be garnering some support from news that Iranian refined products may be held off the market due to fresh conflict in the sanctions talks.
NATURAL GAS
The natural gas market has forged an upside breakout and the highest trade in 9 trading sessions and appears to be supported by ongoing solid demand in Europe and by a much above normal temp forecast for the Northeast and plains states in the US. In fact, cooling degree days are expected to continue to be above normal with cooling demand last week 7 degree days above normal.
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