Morning Update 08/23/2019

The market was quietly ambling near unchanged (55.35 for Oct WTI) when a short while ago the Chinese announced a fresh set of 75 bln dlrs worth of tariffs (5%/10%) on US goods to be applied on Sept1/Sept 15. 

Crude prices fell by 1.5 dlrs fairly quickly, testing support in spot WTI at 5354-59. Below that, we see support at 5305. Resistance now is seen at 5484-85, then at the unchanged area 5533-35, which under current circumstances seems unlikely to be revisited today.

Momentum is moving towards neutral.

The crude price was also hampered overnight by dollar strength according to WSJ. The energy markets also may have been hurt by the following that occurred Thursday: the 10-year yield briefly fell below two-year yields, following a similar move last week. The inversion between short and long-term yields has been widely viewed as a possible recession signal. (WSJ)

Brent Oct futures support is seen at 5800-01; resistance at 5942-47. 

Oct RB support at 15049-60 was tested with a low of 15021. Below that, support is seen at 14973-86. Resistance lies at 15332-44. 

ULSD Oct futures support is seen at 17983-95. Resistance lies at 18281-95, then 18401-07. 

NG is down 3 cts in the spot month as weather demand slackens with much of the Northern half of the US set in the coming days to see temperatures fall by 10-15 degrees from the highs experienced earlier this week.

Yesterday's EIA storage data was neutral, or as NGI publication dubbed it: "Ho Hum.” Storage rose by 59 bcf—right in line with expectations. Storage is now 369 bcf (+15.2%) over last year's level, but still -103 bcf (-3.6%) vs. the 5 yr avge.

Technically, we see NG on the defensive with the reversal of 2 days ago confirmed by the lower close yesterday. Momentum on the DC chart has turned negative and the uptrend support line off the low of Aug 5 has been violated—that trend line intersects today at 2.151.

Support at 2.134-38 has been pierced with next best DC chart support seen at 2.086 area (there may be some light support near 2095-2100). Resistance comes in above at 2812-2187. 

We note that yesterday's high of 2.195 came right after the EIA storage data was released, but the market basically could not stay above the resistance area we see at the 2182-87 area.

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