Written Commentary
NATURAL GAS
August Natural Gas reversed higher early Tuesday, taking back Monday’s losses but remaining inside the sideways pattern of the past two months. With most of the lower 48 states expected to see highs in the upper 80s to the 100s over the next week or so, US cooling demand could finally have some impact on US supply. LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 105.8 bcfd this week to 109.2 bcfd next week.
CRUDE OIL
August Crude Oil edged higher overnight but about the best that can be said for the bulls is that it has not made a new low for the move in two sessions. It is possible the market has gotten oversold on the “reopening of the strait” theme, especially as the divergences between the US and Iranian positions gain attention. An Iranian Deputy Foreign Minister told state TV that Iranian and Omani experts will start talks on redefining transit paths through the Strait of Hormuz in the coming days, but he added that his country will try to obstruct vessels outside defined paths. A Foreign Ministry spokesperson said there would not be any negotiation meetings at any level with the American side in the coming days. Iranian and US negotiating teams were due in Doha this week.
PRODUCTS
The products appear to be leading crude oil higher today. US product supplies remain tight, and the disputes over the reopening of the Strait of Hormuz could keep US exports of gasoline and diesel at elevated levels for a while.
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