Written Commentary
CRUDE OIL
While it appears that a deal within OPEC plus on the debate over an extension of the production restraint agreement beyond April 2022, has prompted a high to low correction of nearly $4.00, it should be noted that the fight within the cartel was not on a more bearish theme of increasing the predetermined amount of oil production return to the market on-a-monthly basis but instead was on the duration of the deal.
While a surprise build in EIA gasoline stocks has reportedly dominated over a bullish larger than expected decline in weekly crude oil stocks the OPEC+ deal story line is the main bearish feature today.
NATURAL GAS
While it would seem like US temperature forecasts have seen a tempering of the area of much above normal temperatures in the US (primarily in the East), we think the weakness in prices yesterday was the result of indications from Chinese LNG importers that they would not buy without a noted setback in prices.
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