Written Commentary
CRUDE OIL
March Crude Oil traded right up to the 10-day moving average early Monday but backed away and was slightly lower, though still in the upper half of Friday’s range. The Iranian Foreign Ministers said on Monday that the situation there is “under total control” after more widespread demonstrations over the weekend and this may have eased concerns about a potential disruption of Iranian supply. President Trump had warned of possible military intervention if there were a violent crackdown on the Iranian protests.
PRODUCTS
February RBOB has found resistance at the 50-day moving average for the second session in a row after rallying to its highest level since December 11 on Friday. The rally off last weeks lows was less impressive for February ULSD than it was for RBOB, perhaps because of the mild winter.
NATURAL GAS
March Natural Gas was higher early Monday but inside Friday’s big range down. The weather forecast has turned colder for the eastern US, but the question is whether this will be enough to ease a burdensome supply situation. The latest 6-10-day forecast has below normal temperatures across the eastern half of the lower 48-states, from) north to south, with above normal expected in the western half. The 8-14 day has the area of below normal temperatures retreating from the south but the northeastern quadrant, the key heating demand area, still shows below normal temps. LSEG said average gas output in the Lower 48 states has fallen to 109.2 billion cubic feet per day (bcfd) so far in January, down from a record 109.7 bcfd in December.
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