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Crude Gains Limited Support


While the IMF upward revision in the outlook for China, widespread expectations of an extension of the OPEC plus production restraint agreement and the upside extension on the charts the bull camp has extended its control. However, there are several signs of improving demand following a 7% year-over-year jump in Indian April crude oil imports, higher week over week global refinery runs, last week’s strong EIA implied gasoline demand reading, and from a minimal upside breakout in last week’s EIA implied distillate demand. Crude oil is also drafting minimal support from recent weakness in the dollar, an attack on a ship in the Red Sea, and a pocket of expectations for a decline in tomorrow’s EIA crude oil inventories. Issues that provide a measure of headwinds for crude oil today are a 1.4% week over week jump in European crude storage, the upside breakout in global sovereign bond yields and the potential for reduced buying from the approach of the highest prices this month.

ocean ol rigs


While US cooling degree days have run well above normal for several weeks and Texas noted record electricity demand, natural gas prices were dramatically overbought from the low to high May rally of $0.90. This week’s Reuters poll projects natural gas in working storage to increase by 73 to 86 BCF. In a longer-term supportive development, the IEA expects Indian natural gas demand to rise by 7% this year.


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