Written Commentary
CRUDE OIL
With another contract high range up move to start the new week, the bull camp picks up where it left off. While the crude oil market saw a flurry of bullish news from both the supply and demand fronts last week, and Goldman Sachs over the weekend raised their upside targeting by $10 per barrel from their previous forecast. However, the US Gulf production disaster is slowly normalizing, with the latest lost output forecast labeling the net loss to be above 30 million barrels!
As we suggested last week, the gasoline market looks to lag the rest of the markets with seasonal demand softening and weekly inventory readings more likely to show inflows to stocks as opposed to outflows. However, reports that fuel tankers are moving toward the UK and Europe to help alleviate severe fuel shortages and that creates a bullish demand environment especially with headlines touting panic UK buying.
NATURAL GAS
With the headline from Bloomberg overnight suggesting China is ramping up gas imports (SINOPEC) and paying significant premiums to surging European cash prices, the bull trend has been reignited in natural gas. Apparently, the Chinese petroleum and chemical Corp. forged the biggest purchases in months, and that is given added influence by reports that Apple and Tesla suppliers have idled some output because of energy restrictions in China.
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