Slow US South Operations Providing Support
Crude oil headed further into new high ground overnight but lost some of those gains as the session progressed. While temperatures have warmed up in Texas, it may take several weeks for oil wells and pipelines to reach their full output potential. RBOB and ULSD made new highs for their moves overnight but were well off those levels this morning.
Natural gas has fallen out of last week’s consolidation zone, which could fuel some long liquidation. Forecasts for warmer weather across the eastern US suggests lower heating and power plant demand ahead. While production in the south-central US will take some time to return to pre-storm levels, output has jumped sharply from last week’s lows, weighing on prices.
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