Energy Markets Cont Higher
So much for the recent deterioration in bullish fundamentals, as crude oil this morning has broken out to the highest level since June 23rd. However the boost in energy demand hopes from favorable vaccine news overnight was given added credence by a large 8.3 million barrel decline in API crude oil stocks. It is somewhat surprising that the latest tit for tat trade action in the US/China saga has not limited energy prices this morning especially with an OPEC plus committee meeting underway. The trade has generally expected some mention of a schedule for gradually unwinding the production restraint on Saudi Arabia and Russia but at the same time the cartel is expected to keep pressure on those who have not lived up to their promises.
The charts in natural gas continue to favor the bear camp with a 5th straight day of lower lows yesterday. While US temperatures are still showing significant areas with above normal temperatures, the much above normal temperature area has moderated with some temporary relief seen this week before further heat returns. Apparently the natural gas market does not see record Chinese crude and copper imports as a potential sign of increased Chinese LNG imports ahead perhaps because China and other sources think it is nearly impossible for China to meet its phase 1 purchasing promises and the natural gas market was widely hopeful that phase 1 buying would stir demand for US supply.
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