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First Look - Speculators continue to bet on European diesel

Oil is trading higher after positive Chinese economic data
- A private measure of China’s manufacturing activity showed an expansion in June to the highest level in three years and has now expanded for an eighth month
Speculators continue adding to diesel positions (BBG)
- According to ICE data, hedge funds and managed money participants have added to their net-long position in European diesel after the biggest-ever weekly addition last week
- Speculators also added to both Brent and WTI net-longs, with the combined position for both now at an eight-week high
- However, optimism on diesel prices is not universal as funds are net short on US diesel traded on the CME, with positioning the most bearish since November 2020

Natural gas traded lower Monday morning amid significant cooler shifts in the weather forecast

Prompt gas was 4c lower to $2.55/MMbtu
The European Ensemble showed Lower 48 temperatures fell by 7.3 degrees east of the Rockies (Criterion)
Hurricane models shifted the path of Beryl further south, pushing the most likely landfall into Mexico

Described as “extremely dangerous,” Hurricane Beryl is set to cause large swaths of damage across the Caribbean’s Winward Islands on Monday

Category 4 status was recently reached with sustained winds of at least 130 miles per hour
Most of the computer models keep Beryl away from US offshore oil and gas operations in the Gulf of Mexico, but things can change with a Mexico landfall not expected until Friday
For more on potential Hurricane impacts on gas prices, check out our recent publication