Slim Rally in Energies
The energy markets will start today in proximity to multi-year highs but crude oil did not make a fresh higher high overnight. The bull case is threatened early today by a stronger Dollar and a potential OPEC Plus output increase going into the weekend. In fact, overnight a large Russian energy company CEO suggested that more supply is needed as oil prices are poised to regain $70.00. Going forward, the bull camp needs persistent evidence of improving demand as supply is clearly capable of increasing in the coming weeks.
While both product markets reached new multi-year highs, the product markets finished Thursday with mixed results. However, the gasoline market has forged a fresh higher high for the move early today and is back to multiyear highs in a fashion that suggest favorable demand views continue to fuel the rally.
Natural gas prices remain on-track for a positive weekly result but are likely to see volatile action during today’s trading. July natural gas continued its pullback from Tuesday’s 2 1/2 week high as they went on to post moderate losses. A stronger Dollar put the market under early pressure, and that may continue today if US jobs data exceeds market expectations.
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