Written Commentary
Price Overview
The petroleum complex failed to follow through on strength linked to a bullishly construed inventory report. Instead, good resistance built near the 67.00 area basis June on active profit taking late in the session. The weakness appeared to reflect caution amid the high infection rates in India. Good buying interest had developed early in the day in response to the API and DOE reports, which helped garner ideas that inventories were moving lower. Additional support was evident from optimism with respect to demand recovering in the US and Europe. The increase in economic activity looks to be accelerating into summer as driving picks up, people return to work and vacation travel accelerates following the easing of lockdowns.
Natural Gas
Prices have recoiled from two attempts at cracking the 3 dollar level basis June. The recent rally peaked early yesterday at 3.001, and another run today topped out at 2.991 before failing, with the market ending the day 3 cents lower at 2.938. Fundamental factors have remained mostly unchanged, with cooler temperatures expected into midmonth supporting slightly improved demand hopes, while LNG flows and production show some inconsistencies due to seasonal maintenance.
Charts Courtesy of DTN Prophet X, EIA, Reuters
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