Written Commentary
NATURAL GAS
While we acknowledge the markets capacity to rebound off its lows yesterday, the fundamental condition lacks a credible reason for natural gas prices to recover from the slide off last week’s highs. As noted already, the natural gas market rallied $0.32 from the COT report into the high last week and that could have left the net spec and fund long at the largest level since May 16th of 2017. While temperatures in 2/3rds of the US remain above normal, the forecast has normal to cooler than normal in the southeast. We would also note that there are no tropical disturbances of note in the Atlantic and Caribbean and therefore a whether premium is not necessary in the near term.
CRUDE OIL
Like other physical commodity markets and the equity markets, the energy markets are likely to see significant impact from the ebb and flow of US stimulus negotiations. The crude oil market might see some support from reports that the US Administration might impose new sanctions on Iran’s financial sector particularly after Iran and Venezuela have undertaken aggressive shipping in violation of existing sanctions.
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