Written Commentary
NATURAL GAS
Despite record Texas electricity demand for May, and a bullish shift in sentiment from the first three sessions of last week, the trend in gas has shifted down. A reduction in the amount of a planned Norwegian outage, and severe and fresh chart damage leaves the bear camp in control to start the new trading week. While the net spec and fund short in natural gas has likely rebuilt aggressively since the last report was measured, the net spec and fund short is probably not excessive yet.
CRUDE OIL
While there is suspicious of the strength in petroleum prices today off the idea that OPEC plus will extend their production restraint program in next week’s meeting, it is possible that a thin measure of stop loss buying/short profit-taking buying is combining with a weaker dollar to lift petroleum prices early. In negative news the Saudis are reportedly poised to cut July oil prices to Asia for the first time since the beginning of the year, but intense fighting in Gaza is probably minimal behind-the-scenes support. Another supportive development is the sharp 31% drop in Mexican oil exports last month. However, bullish sentiment toward Brent crude oil continues to drain and the official holiday weekend kickoff to the north American summer driving season has passed. Looking ahead to the delayed release of the EIA inventory report the trade has a slight bearish expectations with last week’s inflow to crude oil inventory still on the market’s plate.
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