The Energy Space

Energy Price Outlook

The market's whipsawing continued yesterday as a strong rally took place. Our bias had expected a rally late last week and into this week, but we were stopped out of a long recommendation in Brent during Friday's $2.49/bbl selloff. Going forward, the market would appear as though it can continue to rally, however, there remains the uncertainty regarding the U.S. and Chinese leadership decisions. We believe that oil may perform better in the long-run if Romney were to win, but near-term trade could benefit regardless of who wins if some uncertainty is removed. Seasonal tendencies suggest as much as we detailed in yesterday's report. Outside of the election, today's trade will get support from tightening supply/ demand balances shown in yesterday's monthly EIA report, Brent's hold at $105/bbl psychological support on Monday, and the potential that fund liquidation through end-Oct may cease and possibly reverse. Pressure will be offered by the partial closure of BP's Whiting refinery for planned maintenance, the backup of Canadian syncrude, elevated inventories, and ongoing oil production growth. On balance, we look for a slightly higher trade today unless the result of the election is still unknown....2105 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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