Written Commentary
CRUDE OIL
January Crude Oil was lower early Monday following a rally on Friday that took the market to its highest level since November 19. Late last week, traders were viewing the lack of progress on the Russia/Ukraine peace talks as supportive, but the possibility of some sort of agreement remains, which would be expected to bring additional Russian supply to the market. Regardless, the market does not appear worried about any interruption of supply. Ukraine’s President Zelenskiy said on Sunday that talks with US representatives on a peace plan have been constructive but not easy. He is expected to meet with French, British and German leaders on Monday in London. Reuters reports that G7 countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban. Reuters says Russia currently exports about one-third of its oil via western oil tankers, the rest transiting via the so-called shadow fleet, according to Reuters.
PRODUCTS
Gasoline was leading the market lower early Monday, with January RBOB falling to its lowest level since November 26 and within the vicinity of its November 25 low of 1.7756. November ULSD was lower as well. China imported 42.24 million metric tons of refined petroleum products in November and exported 5.12 million, for a next export total of 880,000 tons. This is down from net exports of 1.01 million in October and 1.15 million in November 2024.
NATURAL GAS
January Natural Gas was significantly lower early Monday following a sharp rally to its highest level since March on Friday. The market left a spike high on Friday that has the look of a blow-off top. Cold, wintry weather has arrived to the eastern half of the US, but this has been building for quite some time, having arrived to the Midwest the previous week. The latest 6-10-day forecast has much below normal temperatures centered around the eastern Midwest and Great Lakes and extending eastward to the Mid-Atlantic and New England, with below normal all the way west to the Great Plains and south to the Gulf Coasty from Louisiana eastward.
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