Crude/Nat Gas Morning Outlook 8/26/24
Good Morning…Early Nymex Crude is Trading 1.80-2.40 higher…The US Dollar Index is lower (100.80) and the Dow Jones Futures are steady/higher. Crude futures pushing back above the 200 day moving average this morning on further escalation in the Middle East as Israel implemented an airstrike against Hezbollah’s rocket launching stations. Again, the rise in tensions could bring an Iranian military response which if seen could slow global oil movements (Iran has stated its response will be definite & calculated). Libya is also in conflict within its own country with oil production and exports now in question. The sharply lower US Dollar (now testing the psychological 100.00 area) is also supportive to WTI crude prices. Add in the crude inventories in Cushing OK being at a 6-month low which is keeping front month futures spreads elevated over $1.00/bbl and the near term buying seems justified. Computer quantitative buy stops were also noted in front month Oct futures above the 75.85 area early this morning. Next resistance will be the 50-day mov avg (77.35). A close above turns the near-term trend back to the bulls and will likely add more quantitative hedge fund buyers.
Early Nat Gas is Trading 2-6 cents lower… A major cooling trend in eastern half of the US on the 8–14-day forecast has re-emerged new selling. Ideas that the elevated demand we have seen the past two months is going to disappear very rapidly. LNG exports have remained flat (13.0 BCF/day) and Nat Gas storage still sets at 12.6% over the five-year average. The true near-term fundamentals remain with the bears and as we enter the shoulder months of Sept & Oct, prices still remain vulnerable without a major weather event. Look for hedge funds to remain adding to the short side. Technically Sept NG remains in a bearish structure with major support at the 1.944 to 1.882 areas. Resistance will be the 2.202 area. Only a close back above 2.305 negates the bearish structure.
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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