Written Commentary
CRUDE OIL
Crude Oil failed to follow through on it rally in the wake of a large decline in EIA US crude stocks this week, as demand concerns linger. A cyber outage overnight has caused interruptions and other problems with trading platforms on the London exchanges overnight, include oil and gas trading. The market has been undermined this week from concerns about Chinese demand after their second quarter GDP showed a smaller than expected gain of 4.7%. A rally in the dollar yesterday and overnight, after falling to its lowest level since June 7 this week was also negative to crude oil and other dollar-denominated commodities.
PRODUCT MARKETS
September RBOB has held up admirably against surprise increases in EIA stocks this week and the drop in implied gasoline demand, as the market bounced off a four week low and closed higher for two straight sessions. Gasoline stocks are above the five-year average for the first time since January, and implied demand is lowest since April 28. Initial resistance comes in at 2.4873 today, followed by 2.4995.
NATURAL GAS
September Natural Gas was lower overnight following yesterday’s modest recovery off bullish EIA storage numbers. The report showed US gas in storage was 3,209 bcf as of last week, up 10 bcf from the previous week versus expectations calling for an increase of 12 to 30 bcf. Total gas in storage was up 8.4% from a year ago and 16.9% above the five-year average, versus +9.7% and +18.7% in last the previous week’s report. The market has been undermined recently by the ample US stocks, a slowdown in LNG exports due in the wake of Hurricane Beryl, and a cooler trend on tap for the central part of the US.
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