Written Commentary
CRUDE OIL
While the 3-day high to start today has fostered fresh bullishness, the December crude contract has not taken out a downtrend channel resistance line from the October and November highs at $82.19 this morning. A pair of negative developments overnight thickens resistance above the market with ongoing concerns that the US administration might release supply from the strategic reserve. According to some sources the release from the SPR could be crude oil and gasoline which should have a noted but temporary negative impact.
As indicated already, the gasoline market lagged crude oil on Monday with fears that the US might release strategic supplies of gasoline a front and center concern. A sign of fear of SPR supply is seen from softness in prompt gasoline prices this morning. It should be noted that EIA gasoline inventories are at the lowest levels since November 2017.
NATURAL GAS
With global LNG floating supply buyers down 3.9% on the week, mild weather in the US and Europe, and increased winds (boosting wind generated energy output), the soft start to the trading week in natural gas is fully justified. However, more downside action could be in order as weather forecast for Europe over the coming two weeks suggest it is very unlikely to see below normal temperatures in Europe before the last week of November.
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