July Crude Oil closed down 0.54 at 47.82. This was 1.08 up from the low and 0.37 off the high.

July Heating Oil closed down 1.60 at 148.57. This was 2.23 up from the low and 1.44 off the high.

July RBOB Gasoline finished down 2.31 at 157.83, 1.77 off the high and 2.38 up from the low.

July Natural Gas finished down 0.00 at 3.01, 0.05 off the high and 0.02 up from the low.

The bear camp will suggest the market was under noted pressure because of slack growth in the US could leave energy demand wanting in the months ahead. The bull camp will suggest that the market rejected large portion of the declines as if prices below $47 were too cheap. Clearly the market has lost its respect for the production cut restraint and some might argue OPEC will have to do more to support prices. However, in retrospect the decline in crude oil inventories in the US has continued and gasoline demand remains at record levels! The trade seems to discount press coverage suggesting that US refiners are ramping up production to meet surging demand and that would suggest the trade is more concerned about excess supply than a seasonal increase in demand. Adding into the bear case is news that US horizontal drilling rigs rose by five in the week ending June 2nd and that is the 20th straight week rise in a row. On the other hand, natural gas drilling counts declined by 3 and that suggests low prices are starting to reduce exploration.

Hightower Report