Written Commentary
CRUDE OIL
Oil markets were higher early on Friday despite President Trump extending his pause in attacks on Iran’s energy infrastructure another five days. Uncertainty over whether there are any actual peace talks between the US and Iran, with report of both sides submitting demand that are far apart from each other, Iranian officials defiant, and US troops moving to the Mideast contributing to ideas that the US will launch some sort of ground action keeps the uncertainty level high. The Trump delay has fueled speculation this gives the US military more time to prepared for a ground attack. The United Arab Emirates has apparently told the US and other Western allies that it would participate in a multinational maritime taskforce to reopen the Strait of Hormuz.
PRODUCTS
May RBOB and May ULSD were higher early Friday and were working back towards Monday’s highs. Both markets exhibited key reversal action that day but the moves lacked the strong volume that would support a major top formation. This puts highs from Monday in a vulnerable situation, especially on an any acceleration in military activity in the Persian Gulf region. The Trump administration’s announcement on Wednesday that it would temporarily suspend federal anti-smog regulations and allow retailers to sell gasoline with 15% ethanol only sparked a temporary setback in May RBOB.
NATURAL GAS
May Natural Gas was higher early Friday, up for the second day after putting in at three week low on Wednesday. The EIA Gas storage report on Thursday was bullish against expectations, with storage for the week ending March 20 showing a net withdrawal of 54 bcf from the previous week. This compares to an average trade expectation of -44 and near the low end of the range of expectations from -55 to -14. Storage was +4.9% from a year ago and +1.0% from the five-year average versus +10.3% and +3.3% the previous week.
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