Crude/Nat Gas Morning Outlook 8/28/24

Good Morning…Early Nymex Crude is Trading .80-1.20 lower…The US Dollar Index is higher (101.05?after punching out new yearly lows yesterday). The Dow Jones Futures are steady/lower. WTI crude futures failing at the 50-day mov avg yesterday and closing below the 200-day mov avg has brought selling liquidation back to the crude space. Geopolitical tensions remain high; however, crude seems more focused on China’s weaker demand (refining values in Asia continue?to struggle) and the slowing of driving season in the US. As mentioned before, Geopolitical issues can elevate prices temporarily, however until real physical supply is taken off the market, the rallies remain temporary in nature as the market gravitates towards true demand. The API’s inventory data released yesterday was mostly bullish, crude inventories drawing down once again (-3.4 mil bbls) along with gasoline and distillate decreases. If the EIA’s more reliable storage numbers released later today confirm the API’s decrease in inventories it should support prices. Still, heavy quantitative sell stops have been noted both yesterday and today’s early trade keeping pressure on prices. Technically WTI Oct crude has moved to a bearish structure with trend line support at the 73.53 area. Resistance will be the 200-day mov avg (75.87).

?Early Nat Gas is trading steady/lower…Like a broken record, elevated storage even with near record heat in parts of the Midwest has taken front?month Sept NG down thru contact lows this morning. This may also have?something to do with Sept futures expiring today. Nat Gas Production numbers so far this month are close to 102 Bcf/day and while near term demand is elevated substantially with?the current mini heat wave in the Midwest & east, it will be short lived. High Nat Gas storage values along with the expected cooling trend in the east should keep the sellers close. Another negative, the EIA storage number for tomorrow is looking for a 35-55 BCF injection.? Technically Oct NG remains in a bearish structure with major support at 1.991 contract low, a close below targets the 1.885 area. Near term resistance will be the 2.294 area. Only a close back above 2.383 negates the bearish structure.

Dennis Kissler

SVP/Trading Division

Commodity Risk Mgmt

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

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