Written Commentary
CRUDE OIL
February Crude Oil was lower early Friday despite some belligerent comments between President Trump and Tehran after protests in Iran turned deadly over the weekend. Reuters reports that Dubai crude slipped into a discount against swaps on Friday for the first time since December 2023, which is being attributed to weak demand and excess supply as there were unsold cargoes loading for February. OPEC+ members are to meet on-line on Sunday, and they are expected to continue their pause on production increases. Recent events in Yemen have illustrated a growing divide between Saudi Arabia and UAE, which could undermine cooperation within OPEC. Wednesday’s EIA report came in somewhat bullish for crude oil and decidedly bearish for gasoline and diesel, with US crude oil stocks -1.9 million barrels last week versus -900,000 expected, gasoline stocks +5.8 million barrels versus +1.9 million expected, and distillate stocks +5.0 million barrels versus +2.2 million expected.
PRODUCTS
Wednesday’s EIA report was decidedly bearish for gasoline and diesel. The report showed US gasoline stocks were +5.8 million barrels for the week ending December 26 versus expectations calling for an increase of +1.9, and distillate stocks were +5.0 million barrels vs +2.2 million expected.
NATURAL GAS
February Natural Gas extended this week’s the selloff early Friday, but has managed to hold above last week’s low at 3.467 as of this writing. The 6-10 and 8-14 day forecasts have turned a bit cooler since Wednesday. The 6-10 day still has above normal temperatures covering the lower 48 states from the Rockies eastward, but below normal temps are emerging in California, with normal temps east and north of there. The 8-14-day has the above normal are shrinking to the eastern half of the lower 48, with a normal temps covering the Plains and northern Midwest and below normal temps covering much of the southwest. Wednesday’s EIA gas storage report came in at the bearish end of expectations, with a net withdrawal of 38 billion cubic feet for the week ending December 26, which was a smaller decline than trade expectation of -50 and close to the narrow end of the range of expectations from -60 to -37.
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