Written Commentary
CRUDE OIL
We are surprised in the crude oil markets capacity to claw back into positive territory this morning, especially after an overnight new low for the move. We are also surprised because the markets recovered in the face of news that Japan is preparing its own release of oil reserves at the request of the US. While the release of strategic oil is more a psychological than a physical fundamental influence seeing other countries join in the strategic release is enough to threaten speculative interest in the short term.
Like the crude oil market, the gasoline market made a new low for the move but rejected that slide into the US trade. The market might be supported because of headlines that retailers globally and in the US will likely reduce retail prices because of the October and November slide in futures prices. With the massive range down washout in gasoline last week forged on a slight blip up in trading volume and open interest, the gasoline market would appear to have further liquidation potential.
NATURAL GAS
With the natural gas market holding up in the face of near-term bearish US and European weather, significant spillover pressure from petroleum and against fears of a return to lock down in portions of Europe, the $5.00 level has become credible fundamental support. However, as mentioned before, heating degree day accumulations so far in November have been minimal and therefore negative demand signals are likely to be drawn from the infection count in Germany (Austria is already in lockdown) and other hotspots.
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