Crude Oil Moves Higher
With another higher high for the move this morning and the highest price since early February, crude oil appears to be a “freight train” moving higher in sync with the persistent optimism being thrown off by equities. In retrospect, the energy markets also continue to feed higher off the very surprising and important unilateral offer by Saudi Arabia to reduce production by 1 million barrels per day.
While the higher close in the natural gas market yesterday was very impressive (given a low end of the range storage draw) the action this morning is disappointing given the presence of strong Chinese demand headlines and the expectation of entrenched cold in Germany. In fact, the Chinese government is threatening gas suppliers if they do not increase supply flow to keep factories operating in the face of the worst cold wave in “decades” and the government is also warning of a worsening of supply shortages ahead.
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