Written Commentary
CRUDE OIL
Clearly, fundamentals in the crude oil market have shifted bearish over the last 3 weeks and the negative news has extended into the new trading week. In addition to OPEC plus allowing some restricted production back on-line last month, US oil production declines are showing signs of leveling out above 10 million barrels per day. Other fresh negatives presented to energy prices today include news that global floating storage of crude oil remains 225% above year ago levels, that the US continued to produce more valuable light crude oil than heavy oil in 2019 and fresh suggestions that the bounce in global energy demand will now soften directly ahead. On the other hand, tropical storm Sally is expected to become a hurricane and is set to move toward some offshore facilities and make another transit of key US-refineries later this week.
NATURAL GAS
With the natural gas market technically oversold from last week’s massive washout, tropical storm Sally thought to become a category one hurricane before landfall, global gas prices making noted gains and US LNG production restarting from the last storm shut down prices have reversed course and potentially prompting some stop loss buying. Certainly, the approach of a storm is cause for concern of lost supply, but the track and velocity of the storm does not appear to be as significant as the last storm.
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