Written Commentary
CRUDE OIL
While the strategy of the Russian president is difficult to determine, analysts suggest the Kremlin has shifted its focus away from taking cities and instead is looking to secure rural areas of Ukraine. Therefore, the Russians are not yet considering compromise and therefore oil sanctions are likely set to extend well into the future. By many measures, the war is intensifying with reports last week suggesting a Ukrainian strike against a fuel depot in Russia, and the Russians over the weekend in turn hitting a key Ukrainian refinery and other critical infrastructure in the port of Odessa.
The charts in the unleaded market favor the bear camp with recent global traffic congestion studies showing less activity in many global metro areas. Fortunately for the bull camp, the most recent COT positioning report showed a very minimal net spec and fund long which in turn should help the market respect support around $3.0948.
NATURAL GAS
While the natural gas market has not made a higher high since last Thursday, the market appears poised for further gains. While comments from the Kremlin suggest Russia will not undermine their reputation as a reliable gas supplier to the West, Germany is expected to implement fresh sanctions against Russian this week and that could prompt the Russian national gas company to reverse recent Western supply flow.
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