Written Commentary
CRUDE OIL
Clearly, seeing OPEC plus crush expectations for a larger than prescribed monthly increase in output sparked the aggressive rally yesterday as the trade thinks a 400,000 barrel per day increase in production is not enough to “balance” the world oil market deficit. In other words, the sub cartel followed through with its prescribed monthly expansion of production, instead of enacting rumored proposals to increase production in November by 800,000 barrels per day and not increase output in December.
Like the crude oil market, the gasoline market has started the week out with a veritable explosion on the upside. Apparently, gasoline prices need to rally further to prompt increases in US refinery operating rates to meet current daily demand and higher might also be needed to discourage demand.
NATURAL GAS
While it appeared that the natural gas market is starting to quiet down, the market overnight saw another wave of bullish fundamental headlines. Overnight, the markets saw predictions that surging natural gas prices have added significant demand to crude oil, which in turn should keep overall sentiment toward the entire energy complex bullish.
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