Energy Report: You May Not Want It

Oil closed above its long-term resistance of $63 a barrel. If we close above that again and even better $64 it should confirm technically the supercycle breakout type of trade talk. We were of course warning that the oil super-cycle was coming and now some of the major banks and the commodity charts agree. The Upside risks are still high so hedgers should be hedged.

 We should also get a big draw on Natural gas! Dan Molinski of Dow Jones writes that U.S. government natural-gas data due Thursday is expected to show inventories decreased last week by a massive, near-record amount as a winter storm in the middle of the country curbed production and kept heating demand high.

The Energy Information Administration is expected to report gas-storage levels fell by 334 billion cubic feet during the week ended Feb. 19, according to the average forecast of 14 analysts, brokers, and traders surveyed by The Wall Street Journal. The EIA is scheduled to release its natural-gas storage data for the week at 10:30 a.m. EST Thursday. Estimates range from decreases of 322 bcf to 347 bcf. The average forecast compares with a 145-bcf decrease in storage in the same week last year and a five-year average decline of 120 bcf for that week.

S&P Global Platts Analytics said the expected plunge in inventories could rival the largest weekly storage decline on record, which stands at 359 bcf and was set for the week ended Jan. 5, 2018. "During that week, a 'bomb cyclone' blasted its way across the U.S., prompting freeze-offs and pipeline-related outages in nearly all U.S. basins, dropping supply by 3 bcf per day," said S&P.A 334-bcf decrease last week would mean gas stocks totaled 1.947 trillion cubic feet, 13% below last year's total at this time and 8% below the five-year average for this time of year.

December and January saw a mix of warm and cold spurts that kept in check a long-running storage surplus compared to the five-year average. But a much-colder-than-normal February has caused the surplus to narrow significantly and quickly move toward a sizable deficit.

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Old Time Investor 2 months ago Member's comment

Good read, thanks! Long $USO