Written Commentary
CRUDE OIL
We enter the last trading session of the week impressed with the crude oil market’s ability to hold up in the face of a negative shift in both supply and demand fundamentals. Certainly, prices have retrenched from the high, but the setback so far this week has been only one dollar. In retrospect, the trade seems to have been a little disappointed with Chinese economic data, the US recovery remains questionable off the virus surge and the most important bear argument there is increased prospects of a roll back of OPEC plus production restraint! Apparently, the cartel is set to increase production next month by 1 million barrels per day. On the other hand, the Saudi oil minister indicated that the production restraint deal will continue into next year.
NATURAL GAS
The charts favor the bear camp to start today with the inability to hold above $1.758 likely to provide a wave of fresh selling. Adding to the downward tilt overnight is news that floating storage is expected to rebuild again, expectations that the global energy demand recovery is moderating and a very slight moderating of heat in the US out to July 30th. On the other hand, the coming weekend is expected to see 100 degree plus days in a moderate portion of the US, yesterday’s inventory data was supportive and some weather forecasters have a general pattern of hot temperatures over the coming four weeks.
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