Written Commentary
NATURAL GAS
Like the petroleum markets, the gas market is facing record US production, continued isolated trade from petroleum market news and recent signs EIA gas inventories have returned to a pattern of rebuilding the surplus to the five-year average storage levels. Last week, the Baker Hughes gas rig operating count fell by one but oil drilling in failed basins has yielded associated gas from the Permian and eastern New Mexico production areas. In the end, the most significant bearish statistic is predictions that US October and November gas production will pass last year’s records by a significant margin.
CRUDE OIL
While we suspect the gasoline market this morning is benefiting from the significant jump in Indian gasoline demand in October of 4.8%, (especially with improved diesel and aviation fuel demand) confirming good overall demand in the country. While recent US gasoline consumption figures showed some of the highest “seasonal” readings since 2019 in the shoulder season, gasoline demand has been below year ago levels since the beginning of September. Gasoline should see indirect pressure from the disappointing US manufacturing data last week as softer trucking demand can proceed softening retail orientated driving activity.
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