Written Commentary
CRUDE OIL
We are hesitant to predict a corrective wave in energy prices given the markets ability to discount negatives and embrace positives since the August lows. However, after surging above the psychologically important $85.00 level yesterday, the December crude oil contract has slid back below the Monday lows in a fashion this morning that gives the bear camp some initial confidence.
While the gasoline market is likely encountering some sticker shock at the pumps, two California refineries have been closed due to a storm that impacted most of the US over the prior 2 days. In positive demand stories, Asian activity reports indicate Asian traffic has picked up, while New York Monday morning traffic congestion was reportedly up 23% from 2019.
NATURAL GAS
The natural gas market gap higher off Chinese forecasts of a cold La Nina-inspired winter in Asia. In addition to gapping higher, the December natural gas contract ranged sharply higher and, in the process, regained the psychologically important $6.00 level.
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