Written Commentary
CRUDE OIL
Crude oil and the products are seeing some volatile action today. Nonetheless, over the course of the past week they have recovered a significant portion of their losses from the mid-March downdraft. Comments from a White House official that “progress has been made” on Iran nuclear talks has pressured the energy markets, as a deal would make more Iranian oil available on the world market.
RBOB and ULSD both finished strong on Wednesday, and ULSD continues to lead the way. The EIA report yesterday showed US distillate stocks falling to their lowest level since March 2014. There was a new 2022 high for US refinery utilization, and that may have contributed to a sharp rebound in implied distillate demand. US gasoline stocks were down as well, falling to their lowest level for the year.
NATURAL GAS
May natural gas is trading both sides of unchanged today after reaching a contract high for the second day in a row yesterday. Record US LNG exports and a shift towards cooler weather in the 8-14-day forecast are supportive. Russian President Putin said that Russia will seek payment for Russian natural gas sales from what he called “unfriendly” nations in rubles, and this sparked a 25% jump in European prices. Russia accounts for more than 40% of European gas imports.
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