Written Commentary
CRUDE OIL
August Crude Oil was slightly higher early Monday but remained inside Friday’s range after Iran and the US agreed to renew talks over the Strait of Hormuz and appeared to step back after exchanging fire over the weekend. Reports that Middle East producers are continuing to load oil and LNG also helped limit any gains. Reuters said a fourth Very Large Crude Carrier, capable of carrying 2 million barrels of oil, was seen loading at Saudi Arabia’s Ras Tanura terminal, even after a helicopter belonging to the company crashed on Sunday. The cause of the crash was unknown. Three other VLCCs loaded oil and went dark after they left port, which means they shut off transponders to reduce the risk of attack while sailing through the Gulf. Iran is accelerating its oil loadings after US waived sanctions on its exports for 60 days.
PRODUCTS
Friday’s Commitments of Traders Report showed managed money traders were net buyers of 3,690 contracts of RBOB for the week ending June 23, increasing their net long to 71,366.
NATURAL GAS
August Natural Gas was lower early Monday following a weak close on Friday after the market flirted with its May-June highs. The Midwest is experiencing its first true heat dome of the summer, but World Weather Inc. suggests it will not last past this week, as they expect the ridge will shift to the west over the weekend and allow waves of cooler (less hot!) air to across the Midwest next week, bringing some beneficial moisture and slightly cooler temperatures. The 6-10 and 8-14 day forecasts show above normal temperatures across almost the entire lower 48 states, with the exception of the west coast in the 6-10 day which shows a tendency towards normal temps. Some of the extreme heat moves on as the days progress, but an above-normal bias remains.
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