Energy Complex Lacks Demand
While the energy complex returned to a demand destruction focus last week given a slightly disappointing US jobs headline result, furloughs in airlines underway, a virus spread within the upper levels of the US government and an extended Chinese holiday the market has rebounded this morning off an uptick in stimulus hopes and the improvement in the President’s health. Furthermore, developments from the supply front could provide some countervailing force to recent demand threats, with the Norway oil strike potentially expanding and two threats against production in the Gulf of Mexico.
With severe technical damage on the charts at the end of last week, a slight tempering of hot temperatures in the US, three consecutive closes below the 100 day moving average, the bear camp thought it would retain control early this week. However there are two tropical storm threats emerging, the eastern half of the US continues to see above normal temperatures and the strike in Norway looks to idle more production.
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