Surprise Price Surge May Be Related to Oil Rally (NATURAL GAS) – Natural Gas futures spiked to a two-week high on Thursday before backing off into the close. The market inexplicably rallied enough to take out the recent top at $3.152 after the U.S. Energy Information Administration’s weekly inventories report came in higher than the forecast. The EIA said in its weekly report that natural gas in storage rose by 91 billion cubic feet in the week-ended September 8. This was well above the estimate of 85 billion cubic feet. The 91 bcf increase compares with a build of 65 bcf in the preceding week and represented a decline of 179 billion from a year earlier. However, it was 43 bcf above the five-year average. According to the EIA, total natural gas storage stood at 3.311 trillion cubic feet, 5.1% lower than levels at this time a year ago and 1.3% above the five-year average for this time of year. I can’t say with any confidence that I know why nat gas rallied on Thursday. The storage number came in well above the numbers I had been working with all week. From personal experience, I know that Florida Power & Light is working around the clock to restore electrical power to Floridians. Although I have power (I live in Fort Myers, just north of the hard-hit Naples area), much of the state does not. FP&L sent out a text message saying that all power will be restored by September 22.
Supported by Safe Haven Buying, Weaker Dollar – Gold prices prices moved higher on Friday, as geopolitical risks emerged following news North Korea executed a new missile test, bringing once again to the forefront ongoing tensions between the peninsula and the rest of the world. Gold futures bounced back from a two-week low to close higher on Thursday despite U.S. data showing a faster-than-forecast increase in domestic consumer prices in August. The precious metal was also supported by the news that the Chinese bitcoin exchange BTCChina’s announcement that it would stop all trading from September 30. This could create an asset allocation shift back into more traditional safety plays in the gold market. The price action in gold was primarily driven by the movement in the U.S. Dollar, which closed lower against a basket of major currencies on Thursday after an upbeat report on U.S. consumer inflation failed to impress investors.
CRUDE OIL – U.S. West Texas Intermediate and international-benchmark crude oil continued to surge in reaction to the International Energy Agency (IEA) forecast on Wednesday that the market would continue to tighten as fuel demand increased. The IEA also said the global oil glut was shrinking thanks to strong European and U.S. demand, as well as production declines in OPEC and non-OPEC countries. One catalyst that could drive prices higher and through resistance will be OPEC’s and Russia’s decision to extend the production cuts beyond March 2018. Prices are a little lower early Friday, which could be a reaction to North Korea. Additionally, we may see a near-term pullback to give some of the hedge funds a chance to regroup for a stronger attempt at a breakout decisively to the upside. I think the groundwork has been laid for higher prices, however, investors haven’t decided if they prefer to buy dips or buy strength.
Investment & trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance.
CapitalStars Investment Adviser: SEBI Registration Number: INA000001647
Our Some Best Services Read it Here…