Written Commentary
CRUDE OIL
The charts in the crude oil market remain bearish into the last trading session of the week with the major negative’s this week flowing from warnings of downward pressure on the Chinese economy, a larger than expected weekly EIA crude oil stocks build and to a lesser degree from news that OPEC plus merely rolled over their agreement to return 400,000 barrels per day of oil to the marketplace on a monthly basis until all “idled” production is returned.
While this week’s US refinery operating rate increased by 1.2% and that could help to offset the idea that demand is out stripping supply in the products, inventory levels remain very supportive with gasoline stocks in this week’s EIA report reaching the lowest level since December 2017.
NATURAL GAS
While the press is pointing out the potential for a week over week gain in prices, we see a market fighting to “hold” the gains forged earlier in the week. Certainly, cold weather in the US has provided support to prices this week and the natural gas market in the last COT report did have a moderate net spec and fund short position of 95,609 contracts.
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