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Downturn in Petroleum Prices?


We see the crude oil market vulnerable to a revisiting of consolidation low pricing down at $57.29 in the May contract, but a further wash down to $55.00 should not be ruled out given that the US daily infection rate on Monday jumped back above 60,000. In other words, without the US daily infection rate falling to a new lower range (below 39,000), improved demand timing might be pushed further into the future.


The natural gas market remains delinked with classic macroeconomic signals and prices have remained near yesterday’s spike down failure. In fact, we doubt that a massive risk-on broad-based commodity market rally will lift gas prices in their current situation. With the bull camp heavily reliant on strong demand news, prices are likely to remain under pressure because of a Bloomberg forecast overnight projecting a decline in Chinese LNG demand of 3.9% this month.

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