ENERGY PRICES WERE MIXED ON THURSDAY … natural gas futures in New York tanked, eventually, following another strong report from the EIA, while the liquids complex held firm. Therefore, at this point you have to ask yourself… why is the current economic picture so bearish for natural gas, yet seemingly bullish for oil?
Yesterday the EIA reported that working gas in underground storage increased by 63 Bcf or 2.0% to 3.15 Tcf for the week ended August 07th. This report, along with last weeks and next weeks, tends to be the lowest of the summer. In this vein, owing to this week’s intense (albeit brief) heat in the East, odds are short we will also see a very low injection next Thursday.
GoM storage is already at a record high … and there are still around 12 more injections pending in the season. Given this week’s heat in the East, utilities likely managed cooling load with these excess molecules. Thus, a delivery for next Thursday’s report would not be extraordinary … and it would definitely not be bullish.
Below are excerpts from the support/resistance levels provided in today’s issue of The Schork Report.
ICE BRENT: Brent crude oil on the ICE closed higher on Thursday for a second straight session, but the action was hardly inspiring, i.e. momentum stalled halfway in between our 74.14 inflection point and 75.30 intraday. From this vantage point the market appears frothy.
As far as today goes, bids through yesterday’s 73.84 pivot-high alerts to follow through momentum towards our 74.73 inflection point. We will look for further strength above here towards our 75.86 intraday. On the other hand, offers through yesterday’s 72.96 low-print clears a path towards our 72.23 inflection point. Below here we will look for offers towards our 71.10 intraday.
LIGHT ENDS: A curious early morning spike on the NYMEX yesterday stalled just 51 cents short of our 208.82 intraday. Spot RBOB peaked 15 minutes after the Commerce Department released an utterly disappointing report, i.e. retail sales took an “unexpected” dump in July. Keep in mind, the fact gasoline was able to rally in the immediate aftermath of that report underscores the bullish bias in this market.
As far as today goes, offers through yesterday’s 200.75 low print alerts to follow through momentum towards our 196.85 inflection point. We will look for further weakness below here towards our 195.57 intraday. On the other hand, a rebound through yesterday’s 204.53 pivot-high clears a path towards our 206.99 inflection point. Above here we will look for bids towards bids towards 208.27 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.