Written Commentary
CRUDE OIL
September Crude Oil is sharply higher early Wednesday on the resumption of hostilities between the US and Iran. The US and Saudi Arabia launched strikes on Iran-backed groups in Iraq after the Iran’s Revolutionary Guards fired ballistic missiles at a US air base and a US military Central Command center in Jordan. Tehran has apparently ruled out that proposal by Oman for joint management of the Strait of Hormuz that would include voluntary fees. It appears that Iran is not too interested in negotiating. The Houthis are reported considering imposing fees of their own on commercial ships sailing through the Bab el-Mandeb strait in the southern Red Sea.
PRODUCTS
September RBOB and ULSD were both higher early Wednesday after the hostilities between the nation resumed. Global product supplies appear more dire than crude oil, with refinery operations interrupted not only reduced crude supply out of the Middle East but also from by damage to refineries in Russia from Ukrainian drones. Russia is reportedly preparing to extend its diesel export ban by a month; they first introduced the ban from July 8 to July 31.
NATURAL GAS
September Natural Gas fell to a new low for the move early Wednesday. The nearby contract fell to its lowest level since putting in an 18-month low in April. US production in the lower 48 states is running at a record 110.6 billion cubic feet per day (bcfd) this month, up from 110.0 bcfd in June and in line with the peak in December. The weather forecasts look warmer today, with the 6-10 day forecast showing above normal temperatures across the lower 48 except for some upper reaches near the border with Canada from the PNW to the western Great Plains. The 8-14 day has above normal everywhere.
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