Crude/Nat Gas Morning Outlook 8/23/24

Good Morning…Early Nymex crude is trading 1.00-1.30 higher…The US Dollar Index is lower (101.41) and the Dow Jones futures are 150-200 pts higher. Crude futures making a comeback reversing most of the sell stop liquidation by quantitative funds seen earlier in the week that?most traders feel was an overexaggeration. Keep in mind that crude inventories in storage at Cushing OK, are over 20% below the five-year average and while we have seen a contraction in both China and the US economic activity, fuel demand is still elevated for this time of year. The US Dollar index is also near yearly low’s which more times than not is a positive factor to crude. The Fed’s Powell is also supposed to speak today, and many traders feel he will lean towards lowering interest rates (remember we have an election coming) which if so should spur further advances in crude demand. The SPR is also in a re-filling mode, and they have a lot of ground to make up. OPEC will also be deciding if they are going to increase production in the next few weeks and I believe if we see WTI prices below $70/bbl it will most likely be a hard no. Geopolitical risks while subdued can re-ignite very easily. All eyes will be on the Fed Chairman today and if he hints to no rate cuts it could be a quick negative back to crude. Technically WTI Oct crude futures remain?in a bearish structure with near term support at the 71.56 area. Major resistance remains at the 200-day Mov avg (75.84).

?Early Nat Gas is Trading steady/lower…The EIA storage report was seen as a non-bullish starter as the 35 BCF injection was more than most estimates especially with the heat wave seen across most of the US two weeks ago. Ideas we will likely see much higher injections into the cooling months are bringing the sellers back to NG. Milder weather forecasts for the nations mid-section are also going to be a weight. Keep in mind warmer than normal forecast into September into the Northeast has?much less bullish effect. Therefore, without a major weather event (Hurricane) or producers throttling back further on production it looks like NG will remain rangebound between 1.80-2.50. Technically Sept NG remains in a bearish structure with near term support at the 1.993 area, a close below targets the 1.882 contract low. Trend line resistance sets at the 2.221.

Dennis Kissler

SVP/Trading Division

Commodity Risk Mgmt

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

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