Increase Volatility in Energy Markets
Obviously, the focus of the energy markets shifted toward the prospect that OPEC+ will hold production steady for another 52 days. Clearly, the surprise production concession by the Saudis provided the bull camp with a big fresh assist and that is boosted further by a larger than expected decline in weekly API crude oil inventories. In the end, the OPEC+ alliance has been solidified and the trade must see that as a force that increases support for energy prices.
While the natural gas trade indicated that prices from the December lows were soaring off colder weather, we suspect some of the gains were the result of a general inflation of a long list of physical commodities. In fact, it is possible that natural gas might now be seen as an extremely undervalued commodity, especially when one considers gas is likely to see dramatic purchases by China for winter needs and from views that coal use will be slashed as the world moves toward the Green Deal.
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