Written Commentary
CRUDE OIL
September Crude Oil extended its rally early Monday to reach its highest level since June 11 and managed to close a gap from June 11-12 but then and backed off from there. The market rallied off hostilities between the US and Iran that continued over the weekend. A statement from an Iranian foreign ministry spokesperson today that Iran plans to pursue diplomacy based on its national interests helped pull the market back from its highs. US forces hit Iran for a ninth consecutive day. Iran’s Revolutionary Guards said that two oil tankers had exploded and been immobilized after attempting to transit what it described as an unsafe southern route through the Strait of Hormuz. Reuters could not immediately verify the incident.
PRODUCTS
Product prices extended their rallies overnight as the Iran war continues to keep Gulf refining activity offline and limits refining in Asia due to tight supplies. Russia refining has been hit by Ukraine drones to the point where they have suspended diesel exports. Last week there were reports that they were looking to import gasoline from India. US gasoline and diesel supplies are near six year lows.
NATURAL GAS
The 6-10 and 8-14 day forecasts show above normal temperatures across most of the lower 48, with the exception of below normal temps in New England and the PNW, which should support cooling demand to some degree. Cooler temps are expected to prevail from the central/eastern Midwest to the east coast this week. Weekly US storage builds have been slightly below average for the past four weeks. Last week’s EIA storage report showed that as of July 10, storage was -0.9% from a year ago and 6.0% above the five-year average.
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