As usual do not overreact to the API data as more often than not it is not in line with the more widely followed EIA data. If the EIA report is within the projections I would expect the market to view the results as mostly neutral. However, whether or not the market reacts at all to the inventory report will be dependent on what is going on in the financial markets.
All of the above said for today I am maintaining my oil view at neutral and also keeping my bias at neutral as the US deficit news is unpredictable on an hour to hour basis. Unfortunately I am seeing uncertainty overtaking the market once again and as such the sidelines are optimum until concrete news emerges about a US debt deal.
I am maintaining my Nat Gas view at neutral and keeping my bias at neutral. The market is certainly becoming less interesting from a long perspective at the moment as last week's EIA inventory was considered to be bearish by the market. Also, the technicals are disappointing and moving me solidly back to the sidelines for the moment. That all said it is hot and power generation demand is soaring at the moment. As long as the heat wave remains in place I do not expect any significant sell-off in Nat Gas prices.
Currently most risk asset classes are mostly lower as shown in the following table.
Dominick A. Chirichella
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