Crude Oil Higher, Natural Gas Lower
The crude oil market continues to coil in a very tight trading range, with open interest generally declining since prices first regained the $40.00 level. However, it is likely that some of the “stall” in crude oil prices this month is the result of deteriorating economic sentiment toward the US, but also because talk/expectations of some US oil production coming back on-line. However, prices this morning should see some support from a much larger than expected decline in US crude oil inventories from the API yesterday afternoon.
We are surprised that natural gas has managed to hold near 3 weeks highs. Furthermore, the ability to “hold up” in the face of bearish changes in the US weather forecast out to the middle of August suggests a large and aggressive bear camp contingent is not waiting on the sidelines to attack prices. Perhaps some buyers are anticipating a positive price reaction from a small weekly injection to storage, following a week where US heating degree days were 16 degrees above normal.
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