Written Commentary
CRUDE OIL
We are surprised that energy prices are not sharply lower today as India has announced they will sell 5 million barrels of oil from their strategic reserve and that follows chatter that SKUs and chatter that the White House is considering a ban on crude oil export certainly a ban on US exports would back up US of supply quickly and China will release 7 million barrels of oil. Even more surprising is the fact that prices are not sharply lower today with the president expected to announce a 9-million-barrel US strategic oil sale later today.
Like the crude oil market, the January gasoline contract also forged a new low for the move yesterday and aggressively rejected that low leaving $2.1288 as a potential support level ahead. In our opinion, the gasoline market is even more reliant on strong demand reports from the US into the holiday driving window, especially if lockdowns expand in Eastern Europe.
NATURAL GAS
Like the rest of the energy complex, the natural gas market forged new lows for the move yesterday and appears to be suffering from demand destruction fears. However, adding into the negative global demand destruction fears is soft demand fears from generally mild US winter temperatures so far this year (US heating demand was 9 degree days below normal last week).
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