Written Commentary
CRUDE OIL
While the November crude oil contract this morning forged a new high for the move and a 5-day high, the market has recoiled from that level ($72.18). However, the macroeconomic environment has shifted positive for commodities and a force majeure from the Canadian tar sands area provides the bull camp with several supportive issues.
Not surprisingly, the gasoline market lagged the rest of the petroleum complex on strength yesterday and that was likely the result of gasoline stocks posting the only “build” in inventories of the key EIA measures released yesterday. Furthermore, the gasoline market saw its yearly deficit fall by more than half from 13 million to 5 million barrels.
NATURAL GAS
In retrospect, the natural gas market ran ahead of its fundamentals with the early September range up explosion. In fact, the extreme heat, record prices in Europe and twin hurricanes set a very bullish stage but prices expected the bullish fundamental condition to remain in place.
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