Written Commentary
CRUDE OIL
Steep gains in the energy complex over the past few days have left crude oil and the products vulnerable to profit-taking. Crude oil was down overnight, but the global supply situation remains tight, and we would expect the market to find its footing going into the weekend. A report that that the Caspian Pipeline may have to suspend operations for more than a month provided support to crude oil and the products yesterday, but there were indications early today that some output would be restored in the next few days.
RBOB and ULSD both saw negative reversals from two-week highs on Thursday, and they were down again overnight. US distillate stocks are at an eight-year low, but the situation could be more dire in Europe, which gets a large portion of its diesel from Russia.
NATURAL GAS
Natural gas continues to see volatile intra-day action, but it has maintained an upward bias since early last week. May natural gas made new contract highs for the fourth session in a row overnight. The market could be vulnerable to end-of-week profit-taking today, but near-term supply difficulties could limit selling.
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