3/4ths of US Gulf Oil Production Remains Off-Line
While October crude oil prices are trading moderately higher than yesterday’s close to start today the gains are likely the result of generally prior developments. Obviously, ongoing lost production from the Gulf of Mexico provides a strong underpin for prices, especially with US officials indicating lost supply so far has been 20 million barrels and three fourths of US Gulf production remained off-line as of yesterday.
It was clear that the gasoline market showed less upside sensitivity than crude oil yesterday, and the failure to rally after a massive 7.2-million-barrel decline in gasoline stocks must be a letdown for the bull camp.
At the risk of repeating ourselves, the natural gas market remains in a definitive upward track as a portion of production in the US Gulf (1.72 BCFD) remains off-line going into the last trading session of the week. Furthermore, ongoing hot US temperatures covering nearly all the lower 48 states lends additional credence to the argument that natural gas stocks will enter the Northern Hemisphere heating season in a tight condition.
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