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Sagging Energy Demand


Bullish buzz has been drained from crude oil with signs of increased Libyan output (expected to jump to 310,000 barrels per day from just 90,000 barrels per day), renewed global demand fear from lockdown fears, less tropical storm fear (tropical storm beta lacks strength and is already beyond the brunt of offshore production), a stronger dollar and from news that Indian August crude oil imports were down 23% compared to year ago levels.


We are surprised that natural gas prices are holding within proximity to last Friday’s recovery bounce close with big picture risk off conditions in place early today. However, word that cancellations of US export supply has declined for November, a slight increase in Indian and Japanese demand and spot price gains in both Europe and Asia provide support to prices. Thickening resistance above the market is seen from the return of shuttered US production from recent storms and from strength in the US dollar. On the other hand, the US temperature forecast has shifted slightly more supportive with hot temperatures stoking air conditioning demand in California, Nevada and Oregon.

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