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Potential Strike in Norway


The crude oil market generally coiled within a range last week, but technical traders will suggest the coiling pattern still had a very modest upward tilt, which in turn extended the recovery from the September 20th low. In fact given a risk-on condition this morning, word that floating storage is now 33% below the June highs and signs of a reversal down in the Dollar the bull camp looks to have some protection against bearish news.


We view the natural gas market as too expensive given classic supply and demand fundamentals. Certainly, the bull camp took control last week off what appeared to be a sudden shift in long-term demand prospects following very cold winter forecasts and a sharp upward adjustment in Chinese LNG import readings (Chinese also indicated they would add significant LNG storage). However, the potential to see a strike in Norway could idle as much as 990,000 barrels oil equivalent (meaning combined oil and gas production) and that lends some support to prices.


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