Crude/Nat Gas Morning Outlook 5/6/24

Good Morning…Early Nymex Crude is trading 30-80 cents higher…The US Dollar Index is steady (104.98) and the Dow Jones futures are 100-150 pts higher. Crude trading higher this AM at Israel rejected peace talks with Hamas over the weekend placing the geopolitical fears at least partially back into the market. Saudi also raised cash “Arab light” grade crude prices to Asia signaling they will keep a tight rein on supplies. Many traders believe there are very large deviations in expected fuel demand as a lowering of US interest rates could spark demand, while a holding rates higher for longer looks to be curtailing demand at the moment. The latest increase in US crude storage the past few weeks is concerning and while a higher US Dollar value is a major component, it also points to a slack in demand. I believe we have seen some major liquidation in the crude space from hedge funds and therefore, more buying power could be on the sidelines if we get renewed Geopolitical fears. Technically WTI June crude remains in a bearish structure with major support at the 77.96-75.70 area. First resistance will be the 81.15 area, a close above 81.15 turns the near-term trend back to the bulls.

Early Nat Gas is Trading 2-6 cents higher…The continued fall in rig count with a pickup in LNG demand and a much cooler forecast in the Ohio Valley is bringing further short covering back into Natural Gas. Add in major producers tightening production and perhaps NG prices below $2.00 leave little downside probability for traders. Asia also remains active in the LNG buying space keeping European prices supported as Europe continues to bid against Asia to re-build storage for next season. Technically June Nat Gas has moved to a bullish structure with the next upside target near the 2.38 area. Major support will be the 2.077 area.

Dennis Kissler

SVP/Trading Division

Commodity Risk Mgmt

BOK Financial (OK,TX,CO,AZ,NM,MO,AR)

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