Natural Gas Markets Lower
In addition to an extension of global risk on psychology, energy prices are drafting additional support from a bullish IEA upward revision in global demand of 500,000 barrels per day. With the Saudis posting a decline in May production of 6.6 million barrels per day it would appear as if the bull camp is assuming that supply and demand continue to converge which favors the bull camp.
With the fresh contract low this morning and widespread expectations for a bankruptcy filing gas giant Chesapeake Energy, it is possible bearish capitulation is in motion. Unfortunately the last net spec and fund positioning showed the market only modestly net short and therefore we see additional selling capacity.
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