Written Commentary
CRUDE OIL
October Crude Oil was lower early Thursday as the market continued to assess the surprisingly large build in US stocks from Wednesday’s weekly EIA report. The market is also assessing recent revisions down in demand forecasts, although that should not be a surprise given the high prices and uncertainty about supply. Iranian sources told Reuters that there has been no progress in the talks to reopen the Strait of Hormuz, which is where we stood yesterday at this time. OPEC lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day, and IEA expects a 1.6 million bpd decline.
PRODUCTS
September RBOB and ULSD markets are mixed this morning, but in general they have held up better than crude oil. In the vacuum of any changes in the US/Iran standoff on the Strait of Hormuz, the market seems to be focusing on the Wednesday’s EIA report this week. The report showed US gasoline stocks fell 1.0 million barrels last week versus an expected decline of 1.2 million, while distillates were down just 10,000 barrels versus an expected and decline of 1.3 million. The gasoline report was neutral and distillates were bearish but nowhere near shock of the huge increase in crude supply.
NATURAL GAS
September Natural Gas was slightly lower early Thursday but inside the consolidation it has held since its rally on Tuesday. LSEG is putting average gas output in the US lower 48 states at 111.1 billion cubic feet per day (bcfd) so far in August, up from a monthly record high of 110.7 bcfd in July, and this seems to be offsetting any potential boost in demand off an above normal temperature forecast for most of the lower 48 in the 6-10 and 8-14 day outlooks.
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