Written Commentary
CRUDE OIL
All things considered, the energy complex performed impressively yesterday in the face of evidence of a massive infection jump on Monday, despite a significant jump in interest rate fears and in the face of a strong dollar. Perhaps the energy markets were held back from even bigger gains because of the OPEC+ decision to follow through with production increases at the beginning of next month.
In a positive longer-term development China has apparently reduced fuel export quotas by nearly 20% in some products. In fact, after the close yesterday, the API released its weekly stocks figure with gasoline stocks increasing by 7.06 million barrels.
NATURAL GAS
Unlike the petroleum complex, the natural gas market simply waffled within a range yesterday. However, the market did forge a 3-day high before reversing and closing back near its lows of the session. We also see a softening in cash prices in different portions of the world, but the potential for a coal shortage in China because of issues at a prime coal supplier, could force prompt purchases of gas in Asia.
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