Russia Oil Production Declines
The bull camp has to be little disappointed in the lack of gains in crude oil this morning following a much larger than expected decline in API crude oil stocks yesterday afternoon and also because of news that Russian oil production in August declined by 12.9%. Clearly, the upward track in prices should have been extended following a series of strong global factory activity readings of the past 24 hours but also because of news that crude oil supply in the main European hub declined by 3.5% over last week.
We remain fundamentally bearish toward natural gas prices, with the technical action overnight adding markedly to our bearish view. In fact, we think it will take a significant change in the US temperature forecast, a sudden formation of a hurricane from a disorganized tropical wave or dramatic improvement in the global economic outlook to prevent a noted washout directly ahead.
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