Crude/Nat Gas Morning Outlook 6/27/24

Good Morning…Early Nymex crude is trading 40-70 cents higher…The US Dollar Index is lower (105.82) and the Dow Jones futures are 60-90 points lower. Crude trading higher this AM but still in a consolidating pattern with seasonal demand and continued unrest in both the Middle East (Israel/Hamas conflict looks to be migrating towards Hezbollah) and the Russia/Ukraine conflict remains escalated.??Renewed?inflationary fears (higher interest rates for longer) and further weakness in Asian equity markets (Hang Seng stock index trading lowest levels since mid-April) is keeping the sellers active on rallies. The EIA’s storage data was also a bit negative showing a rise of 3.59 mil bbls in crude and gasoline rising 2.65 mil bbls. The positives being a small drop in distillates, and Cushing OK did see crude supplies drop (200k bbls). This still places crude inventories at 6 mil bbls below the five-year average. ?The major market positive in my view is even with the mostly negative storage data, futures seen resilient to a sell-off, which places summer driving demand and the geopolitical fears of war escalation as the near term driver for crude. Technically WTI Aug crude remains in a bullish structure with trendline resistance at the 81.77 area, a close above targets the 82.80 area. Near term support rests at the 80.23 area.

Early Nat Gas is Trading steady/lower…Hotter temps remain in the forecast which is keeping the latest sell-off subdued with Aug futures testing the 50-day mov avg (2.724). A close below flips the near-term trend to the bears and targets the 2.605 area. The EIA storage number this morning should be the market mover with estimates in the 45-55 BCF injection range which is still well below last years of a 76 BCF injection and the five-year average of an 85 BCF injection. While we should see more storage taken away from the 5-year avg, the current premium of 22.6% still leaves a negative tone. Again, technical weakness could accelerate the selling, but I look for buyers to emerge very quickly if front month prices approach the 2.50 area. Near term resistance will be the 2.90 area.

Dennis Kissler

SVP/Trading Division

Commodity Risk Mgmt

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

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