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Sharp Declines in Petroleum Markets


In addition to significant chart damage in crude oil to start today the WTI market is feeling the pressure of the first decline in Brent crude oil below the psychological $41.00 level since the key June consolidation lows. Adding into the negative bias is news that Saudi Arabia has moved to reduce prices to Asian customers in-an-attempt to facilitate demand and maintain market share. It would appear as if the definitive negative track in global energy prices is further linked to the deterioration in global energy demand views as the worldwide infection problem continues to extend thereby leaving a large portion of the world under restricted movement status.


With news overnight that Chinese coal imports continue to drop sharply and the Chinese government indicating a shift toward cleaner fuels it is increasingly more likely that the rally in gas prices over the past 2 months and the ability to hold above $2.40 is the result of expectations for a significant jump in Chinese LNG demand. In fact, the trade minister in Singapore has suggested there has been a wave of companies moving to open LNG trading desks in the country and that area usually trades into China.

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