Written Commentary
CRUDE OIL
While the February crude oil contract this morning has forged another higher high for the move and has attempted to settle in above the psychologically important $80.00 level the market is short-term overbought and is facing a potential major outside market fundamental development today. The upward bias today is the result of production problems in Libya, Kazakhstan and to a lesser degree from Nigeria.
Like the crude oil market, the gasoline market extended its pattern of higher highs today and has regained a psychologically important $2.30 level. In fact, the gasoline market has extended its strength directly in the face of news of a 10% increase in European stocks of gasoline and gas oil.
NATURAL GAS
While it is not good for an analyst to predict sideways consolidation action, that appears to be the rule of the day in natural gas. However, given yesterday’s bearish US storage report, the argument of “tightness of US supply in the winter is fading. Granted temperatures are turning colder/seasonably, but the biggest force going forward is likely to be Russia’s behavior.
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