Written Commentary
CRUDE OIL
While the magnitude of the higher high for the move this morning in the October crude oil contract is not overly impressive, the market continues to claw higher in the face of negative news. Overnight the market was presented with news that China slowed its inventory build rate and the market was also presented with the fact that Chinese July crude oil production jumped by 0.6% over year ago levels with cumulative January through July Chinese crude oil production gaining 1.4%.
NATURAL GAS
While the October natural gas contract failed to sustain a new high for the move yesterday, it did manage a higher high for the move before falling back and that should leave the bull camp with some hope today. While the net spec and fund long positioning in natural gas is small from an absolute number perspective, the natural gas market over the past 10 years has mostly held a net spec and fund “short” and therefore modest net long positions are rare and might indicate an overbought spec positioning.
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