In an earlier post, we noted the long-term breakout of cotton futures in the context of what has been a historic short-term run. Elsewhere in the commodities space, there are other breakouts occurring today.  As shown in the first chart below, crude oil took out its July intraday high of $76.98 yesterday and it has continued to move above those levels today. While crude oil is now within one dollar of $80, natural gas is also hitting a new high as the commodity continues to surge on supply concerns as we discussed in today’s Morning Lineup.

As both commodities rapidly trend higher, comparing the two, natural gas comes out as the clear winner recently.  In the chart below we show the ratio of front-month crude oil futures to natural gas futures.  When the line is rising, oil is outperforming natural gas.  When the line is falling (as it is now), natural gas is outperforming oil.  Since this past March, the ratio of the two has been in a steady decline and it is now at the lowest levels in a little under one year.  Prior to that, the only lower readings in the ratio of the past five years was when crude prices went negative in April 2020 and in November 2018.  Click here to view Bespoke’s premium membership options.