Crude/Nat Gas Morning Outlook 8/29/24
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 50 -1.00 higher…The US Dollar Index is higher (101.36 still near a yearly low) and the Dow Jones Futures are 200-250 pts higher. Escalations continue from the Geopolitical side with Israel continuing attacks. Ukraine is said to have attacked two oil terminals inside Russia. Libya slowing and even stopping some oil production in one of its biggest oil producing areas. While it's not clear the amount of exports Libya will cut, some analysts say 500k/bbls/day to 900kbbl/day could be impacted as internal disputes over control of their banking system remain a concern with traders. The EIA did report yesterday a decline in crude storage, although it was lighter than the API had predicted (- 800k vs -3 mil) and the EIA also showed decreases in gasoline and distillates (diesel) which is also a positive to prices. The latest sideways action has kept traders on the sidelines for now as China’s oil import appetite will continue to be monitored as well as how Libya will react with exports. WTI prices over $80/bbl could be a marker for OPEC to begin easing production next month. Technically WTI Oct crude remains in a bearish structure with near term support at the 73.82 area. Resistance will be the 200 day mov avg (75.88).
Early Nat Gas is trading 3-6 cents lower… Weather turning cooler is keeping the sellers active and keeping the bears in charge. The EIA Nat Gas storage number expectations this morning is looking for 35-40 BCF injection. The five year average for this date is a 43 BCF injection. While we are seeing the latest injections contracting the premium of storage to the 5 year average, it’s been a very slow painful narrowing. In traders view, Summer is over, and the real question will be how much more production will be brought on by producers. Technically Nat Gas remains in a bearish structure with major support at the contract lows (1.991). A close below targets the 1.85 area. Resistance will be the 2.284 area. On the positive side, futures are nearing an “oversold” condition.
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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