We are two weeks in to the year and the oil and gas markets in New York and London have established opening ranges.
The top of the current range in New York for the market in crude oil looks to be in the area of 93.80 with a bottom of around 88.90. As far as Henry Hub gas futures are concerned, the market has thus far settled in to a range from 4.70 and 4.30. Meanwhile, in London the market for Brent crude oil has been defined by 99.50 at the top and 92.75 on the bottom. As far as the North American natural gas market goes, we are now at the coldest stretch of the winter.
Be that as it may, spot prices are entrenched well below the $5 mark. That is all you really need to know in regard to the pathetic state of this market.
On the other hand, the oil markets are emitting mixed signals, i.e., the contango in London (Brent) has flattened, while the contango in New York (WTI) has increased. Over the last month WTI’s discount to Brent has blown out by 118 bps to 3.1% or from $4.08 a barrel to $6.87!