Written Commentary
CRUDE OIL
From a technical perspective, the March crude oil contract yesterday forged a 2nd straight day of new contract highs and a setback from those highs into the close. Without a new high for the move in the early action today, March crude falling below yesterday’s low and failing at the psychological $85 level early today it appears the market has lost bullish momentum. On the other hand, the market has maintained bullish resiliency for nearly two months and the situation with Russia and Ukraine is far from solved.
As indicated in the crude oil coverage today Bloomberg traffic congestion studies in China have moderated and that product bearish development is joined by news that Singapore weekly fuel stocks increased on a week over week basis. While the strong demand theme rings loudly in the gasoline market into the 4th trading session of the week, prices are beginning to feel expensive.
NATURAL GAS
With a significant reversal and 6-day low early, the natural gas market is registering its dismay on the low amount of heating degree days expected into the end of the month of January. In other words, even a cold finish to the month would only produce average demand for heating. Other fresh negatives overnight came from reports that Asian prices have given up recent gains, Chinese importers are turning sellers and this morning there has been a 14% decline in UK wholesale gas prices for next week’s fuel.
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