Written Commentary
CRUDE OIL
The inability to hold a 3-day high overnight and a quick setback to the vicinity of the 21-day moving average at $72.09 sets up a test of the bull case this week. However, in addition to another bullish weekly EIA crude oil stocks decline last week, the market is supported by news that Putin had no plans to talk to OPEC+ at present, there was a record US implied gasoline demand reading last week and the market is supported by news this morning that crude oil in global floating storage remains 51% below year ago levels.
The gasoline market has regained 80% of its correction from last week and is clearly benefiting from last week’s US all-time-record high implied gasoline demand reading. The market is also underpinned as-a-result of news of improved Indian product consumption, a lack of rebuilding EIA/API gasoline supplies especially with very active US refining.
NATURAL GAS
While the March through June rally was justified by extremely cheap pricing, prices appear to have stalled just above $3.60 in a fashion that suggests fresh demand news is needed to extend prices toward $3.80. Certainly, long-term inflation/fund interest views natural gas as cheap, but the mid-June through early July rally likely discourages buyers above the $3.60 level for now.
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