Written Commentary
Economic Disappointment Increases Resistance for Energies
CRUDE OIL
While the crude oil action has remained in an upward slope, ranges and net gains have been very limited potentially sending off signals of waning bullish momentum. However, weekly crude oil stocks did decline, despite a large jump in US imports and in the face of a continuation of massive refinery capacity being held off-line. As in many other markets, the crude oil trade should be disappointed today by the lack of proactive stance from the US Federal Reserve at the end of last month as that has resulted in a downgrade in economic expectations which in turn downgrade energy demand prospects.
NATURAL GAS
While the natural gas market has clearly benefited from the recent pattern of hot temperatures in the US and forecasts overnight show a slight expansion of the extreme heat area in the southwestern US, we suspect the focus of the natural gas market is poised to shift to a pair of tropical storms already in the Caribbean. While Atlantic formed storms can track into the Gulf of Mexico, the natural tendency is for those storms to veer away from the US coast due to the Gulfstream.
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