CRUDE OIL
Despite seeing an International Energy Agency downward revision of 2020 world oil demand of 200,000 barrels per day, the November crude oil contract has hooked upward for a 3-day high! Obviously, the approach of hurricane Sally and an unprecedented amount of storm threats in the Atlantic (5 or 6 depending on your interpretation) has stepped in and prompted fresh speculative buying. Another factor dramatically likely to increase volatility is the fact that hurricane Sally is a very slow-moving storm which in turn could leave flooding throughout key refinery areas for an extended period-of-time.
NATURAL GAS
Despite a “very long list” of tropical storms and a hurricane, Natural gas has forged a downside breakout and the hit the lowest price since August 14th. Clearly, the bull camp should be disappointed by the lack of upside sensitivity given the number of supply threats developing and more specifically because the US Bureau of Safety and Environmental Enforcement reports that up to 25% of US Gulf offshore natural gas output has already been closed. There could be some minimal support from a slightly warmer US weather forecast but given the looming North American shoulder season and ongoing fears of soft overall global energy demand, supply issues might have less bullish influence.
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