Lower Crude Prices
While the action in the energy complex yesterday was quite impressive, the bull camp will continue to face demand threats in the coming 36 hours. Clearly the market deserved to benefit from another large weekly decline in EIA crude oil inventories. In fact, US crude oil stocks have now fallen by nearly 18 million barrels in just 2 weeks with the annual surplus in crude oil stocks also narrowing by nearly 13 million barrels in just 2 weeks.
The natural gas market flared higher again yesterday and in the process extended the 4-day rally to $0.48, which in our view suggests the market is very overblown from both technical and fundamental perspectives. In fact, some traders are suggesting the new high for the move reversal and lower close yesterday is evidence of a key chart reversal in the coming sessions.
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