Written Commentary
CRUDE OIL
While the energy complex was able to overcome thin holiday markets and sluggish global risk sentiment to climb further into multi-year high territory yesterday prices this morning have not displayed a definitive direction in the early action. Ongoing concern that global supply will remain tight as demand improves during the fourth quarter has underpinned energy prices for weeks. On the other hand, fresh financial contagion fears in China combined with severe flooding and disruption of some commodity production in China (coal) could be seen as a negative demand force thickening overhead resistance.
Both product markets finished Monday with sizable gains, but ULSD continued to hold the upper hand on crude oil and RBOB. The prospect of stronger demand from truckers to relieve supply chain bottlenecks continues to provide underlying support to the diesel market.
NATURAL GAS
Natural gas prices have lost more than 15% in value over the last four sessions in spite of ongoing shortages in many parts of the globe. In fact, extreme flooding in China has disrupted coal production/transportation and yet that has not supported prices in the early action today.
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