Written Commentary
CRUDE OIL
While there would appear to be slightly negative macroeconomic vibes pressuring crude oil early on and news that Chinese January through June crude oil production increased by 1.7% that news is partially offset by the fact that Chinese June crude oil throughput increased by 9%! On the other hand there are indications that China is set to slow future purchasing interest and seeing an OPEC committee recommend a tapering of production restraint is a key fundamental pivot against the bull camp. Apparently producers will remove restrictions on 2 million barrels per day to an ultimate return of supply of 7.7 million barrels per day over the coming months.
NATURAL GAS
The bull camp has some argument of strengthening support at the $1.765 level in September natural gas from the prospect of 100+ degree temperatures in parts of the US in the coming days. Furthermore we also expect some support from today’s inventory data as a lower than expected injection could confirm that warm temperatures are having some impact on supply. It should also be noted that Chinese June power output increased by 6.5% but that positive demand signal is muted by the fact that China has not been a dominating player in the natural gas import marketplace.
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