Crude/Nat Gas Morning Outlook 5/31/24
BOK Financial - Energy Financial Services
Experienced bankers, engineers, derivative consultants & analysts provide a financial resource for the energy industry.
Good Morning…Early Nymex crude is trading steady/mixed…The US Dollar Index is lower (104.60) and the Dow Jones futures are steady/lower. Crude futures feeling pressure this week from weakening economic numbers from China along with technical weakness with front month July WTI crude closing below the 100-day mov avg yesterday tripping some “sell stops.” The EIA did show a large drawdown in crude storage (4.15 mil bbls) however, gasoline and diesel storage rose which basically neutralized the report. Most traders are expecting OPEC+ to maintain current production cuts into year end, any deviation of that course could be decided next week. The concern remains with economic demand, and with the Memorial weekend behind us, the higher interest rates for longer and disappointing data from China is keeping traders in a nervous state. Add in technical chart weakness and crude seems vulnerable to further price weakness. Technically WTI July crude remains in a bearish structure with near term critical support at the 76.15 area. Resistance will be the100 day mov avg (78.18). A close back above should neutralize the trend and target a rebound up to the 80.27 area.
Early Nat Gas is Trading 2-4 cents lower…rising US production numbers (up .5%) with the forecasted temps now showing a cooling ban making its way more southerly and eastward. Again, with the EIA’s storage number yesterday showing an 84 BCF injection, keeps the premium of storage to the 5-year average at 26.5% above. Therefore, without abnormally warmer forecasts NG futures should continue to see selling pressure. The LNG takeaway will remain the positive and I believe demand is well underestimated, but weather will still dictate price in the near term, and currently its remaining to the mild side. Technically July NG remains in a bullish structure with near term support at the 2.517 area, then the 50-day mov avg (2.469). Resistance will be the 2.682 area.
HAVE A GREAT WEEKEND!!
Dennis Kissler
SVP/Trading Division
Commodity Risk Mgmt
BOK Financial (OK,TX,CO,AZ,NM,MO,AR)
Trade Desk 405.272.2026 Cell 405.203.8618
Please call the trading desk for live pricing and option strategies. 405.272.2026
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