Thinking Out Loud… Random Sunday Thoughts…
1. Friday’s price action felt a bit like capitulation. However, this capitulation only took WTI and Brent to fresh lows, not RBOB, not ULSD, not Gasoil. If this was capitulation, I would have liked to have seen the entire petro complex making fresh lows.
2. In terms of the price action, it may look and feel a bit like capitulation, but this capitulation has only come from traders. Analysts have not yet thrown in the towel.
3. When the analysts and forecasters concede defeat, then I think we have a better chance at a longer term bottom and a buying opportunity.
4. It is quite early to be hunting for a seasonal low in crude and products. Typically, the window for a seasonal low is late Q4, early Q1. Can Hurricane Ian change that?
5. Given the uncertainty regarding the track of the first storm to impact the gulf, I would not be surprised to see a pop in crude and products to start the week.
6. At this time, I would be inclined to treat any pop on the hurricane threat as corrective in nature.
7. It will be interesting to see the reaction from NatGas. My initial thought here is that European NatGas could catch a bid while US NatGas comes be under pressure given the LNG export situation.
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