Written Commentary
CRUDE OIL
The crude oil market should remain under pressure as the two main tenants of the bull case is the idea of ongoing tightening of supply and a “pattern” of improving demand. While we might be premature to call for an end to the pattern of declines in EIA crude oil stocks over the past 2 months, the EIA crude stocks have posted inventory builds in two of the last three readings.
Not to be left out, the gasoline market also came under aggressive selling pressure yesterday because of demand concerns. In addition to a demand hit from a much weaker than expected US ADP job report, news of increased activity restrictions in China due to spreading infections also calls demand into question.
NATURAL GAS
The natural gas market exploded into an upside breakout yesterday after an extension of extreme hot temperatures in the Northwest and Northeast of the US out beyond mid-month, but market also saw lift from reports of very active US LNG export activity. In fact, the 15-day temperature forecast projects cooling degree days in the Northeast and Midwest to run much above normal.
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