Energies Mostly Higher
Fortunately for the bull camp, the crude oil market this morning has found some support from favorable Chinese PMI readings and from bullish psychology flowing from global equity market action. Other cushioning overnight developments were seen from lower crude oil production (in the first half) from China Petroleum and Chemical, fresh import license grants by China for domestic firms, a reduction in Oman October crude oil allocations of 20% and the potential for very disappointing big oil earnings, as that increases the likelihood of significant reductions in exploration.
While we were unclear as to the force behind the rally in natural gas prices over the past 2 weeks, the driving market force going forward is likely to be a moderation of US temperatures and surging macroeconomic slowing fears in the US. However, the bull camp is likely to draft some support from reports that Chinese first half natural gas consumption increased by 4% and from news that the Chinese government has asked Beijing Gas to “lock-in” LNG supply for its new terminal.
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