US Weather Cushion Energy Prices
In our opinion, the energy complex was saved from a veritable beating yesterday by threats of an oil worker’s strike in Norway and a sudden 180 degree shift up in macroeconomic psychology. In other words, the extreme rancor from the presidential debate, increased Libyan production strength in the dollar and significant chart damage in crude oil from Tuesday’s washout could have set the stage to throw prices back down to the September lows but the market held up.
While we remain bearish toward natural gas because of recent damage on the charts and from the likelihood of a larger than expected weekly injection readings today, US weather offers some minor cushion to prices. On the other hand, above normal temperatures at this time of the year is less important and some weather forecasts are already indicating that heating degree days will be below normal.
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