Crude/Nat Gas Morning Outlook 7/3/24

Good Morning…Early Nymex Crude is trading steady/higher… The US Dollar Index is lower (105.58), and the Dow Jones futures are steady/mixed. Crude trading a touch higher this AM as Aug WTI futures retreated late yesterday after futures touched the highest levels since March. The Strategic Petroleum Reserve is said to have released 1 mil?bbls of gasoline from the reserve to temporarily pull-down gasoline prices which will be a near term pressure point for crude. China’s overall weaker economic numbers across the board is still a concern. The Fed Chairman, while toning down inflation, did state interest rates will need further mkt data before being lowered, and OPEC production numbers rising last month have?slowed the pace of the crude oils bull mkt. On the positive side, global diesel supplies have been contracting and oil production growth in the Permian basin is expected to contract in the next few months with the latest slowdown in drilling. ?The API released its storage data late yesterday which showed a larger than expected decline in crude inventories (9.163 mil bbl decline) with gasoline rising slightly and diesel inventories declining. All eyes will be on the EIA storage numbers this morning to see if they agree with the API’s large storage decline. Technically Aug WTI crude futures remains in a bullish structure with major resistance at the key reversal area (84.38), a close above targets the 85.27 contract high. Trend line support rests at the 82.52 area. Caution is warranted as futures remain near “overbought” territory with a possible key reversal high in place.

Early Nat Gas is Trading 1-3 cents higher…?Long liquidation has been the latest price driver as the heat in the northeast has been underperforming forecasts, however the latest sell-off may well be overexaggerated. Prices are getting back near the bottom feeders wheelhouse. The Texas state legislature is looking to expand its energy funding program to build more Nat Gas fired electricity generation plants which could initiate other states to follow suit. Weather will still be the positive driver for prices while storage levels are the negative. The EIA storage number for this week is looking for a 25-35 BCF build (current storage sets at 3.097 TCF with the five-year average being 2.57 TCF). Therefore, we have a ways to go to balance storage. Technically Aug Nat Gas remains in a bearish structure with near term support at the 2.36 area. Major resistance sets at the 50-day mov avg (2.728)

Dennis Kissler

SVP/Trading Division

Commodity Risk Mgmt

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

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