Be that as it may, as our friend, economist Joel Naroff points out in his eponymous note, “Households are spending a little and saving a lot as they wait and see where the economy will go.” In other words, while the ranks of the unemployed continue to rise, wages and salaries continue to sink. Therefore, consumers are responding accordingly… and that was before the current technical spike on the NYMEX.
As such, if Americans were wary of gasoline at the pump when spot WTI averaged $69.70… how are they going to react at $75 and beyond?
For tomorrow’s EIA report the market is looking for a 60 Bcf injection. We are now entrenched in the second time bucket (of three) of the refill season.
As such, injections over the next five-or-so reports will be some of the lowest of the season, i.e. below 70 Bcf per.
In this vein, tomorrow’s report, which covers what is historically the hottest part of the year – the 5th to 6th week following the summer solstice – tends to be the lowest of the season with a typical injection of around 56 Bcf.
Last year the EIA reported a 56 Bcf injection for the corresponding week (01-Aug-08).
In this vein, current market expectations are in accord with seasonal norms. Implied weather demand was strong in the southern latitudes, but seasonally weak in the north, particularly in the upper Midwest and New England market.
As far as today goes, bids through trendline resistance at 4.084 alerts to follow through momentum towards our 4.194 inflection point.
Analysts at The Schork Report will look for further strength above here towards our 4.234 intraday.
On the other hand, offers through yesterday’s 3.964 pivot-low clear a path towards our 3.808 inflection point. Below here we will look for offers towards our 3.768 intraday.
Stephen Schork is the Editor of, "The Schork Report"and has more than 17 years experience in physical commodity and derivatives trading, risk systems modeling and structured commodity finance.