Gulf Production Remains Offline
While the latest Gulf Coast hurricane has sparked fresh supply fears, we see the supportive impact as a temporary situation. In other words, the storm has already made landfall and has merely delayed or complicated the restart of US production and refinery activity. On the other hand, the International Energy Agency provides the bull camp with fresh fuel with its statement that vaccines are set to “unleash” energy demand. Furthermore, the IEA indicates that the world will “have to wait” until October to see extra supply begin to dent the rally in prices.
With another higher high for the move, positive global energy demand views from the IEA, and another storm likely hindering US refinery activity the bull camp extends control over RBOB.
With the natural gas market extending on the upside again overnight and reached the highest levels since early 2014, the next upside area of importance on the weekly charts from June 2014 is moderately higher up at $5.45. Apparently, the market is unconcerned about disruption of export activities from hurricane Nicholas and from news that supply in global floating storage increased by 5.6% on a week over week basis.
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