CRUDE OIL
November Crude Oil is lower this morning after an overnight rally. Demand concerns seem to be outweighing the fears of escalation in the Mideast conflict, despite Israel’s recent attacks in Lebanon and Yemen and their confirmation that the long-time leader of Hezbollah had been killed in a strike last week. China’s economic data continues to indicate a sluggish economy The manufacturing PMI for September, released overnight, came in at 49.8. This was up slightly from 49.1 in August, but it still indicated a contracting economy, as it was below 50 for the fifth straight month. It was the highest in five months. In another attempt to stimulate their economy, the Peoples Bank of China said overnight that it would tell banks to lower mortgage rates for existing home loans before October 31. Chinese equities saw their biggest one-day gain in 16 years off the news, but this was also just ahead of a their week-long holidays, which may have exaggerated the move. The Baker Hughes rig count on Friday showed US oil rigs in operation were down 4 rigs to 484 last week. This was down from 502 rigs a year ago and below the five-year average of 486. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 28,703 contracts of crude oil for the week ending September 24, increasing their net long to 161,928.
PRODUCT MARKETS
Friday’s Commitments of Traders Report showed managed money traders were net buyers of 15,415 contracts of RBOB for the week ending September 24, increasing their net long to 23,879. For ULSD, managed money traders were net buyers of 3,323 contracts, reducing their net short to 42,114.
NATURAL GAS
December Natural Gas reversed higher on Friday and held those gains overnight. Hurricane Helene avoided LNG export facilities, which eases concerns about reduced offtake. Last week’s EIA gas storage showed a 47 bcf build for the week ending September 20, but it was the smallest build for this week in the season in at least five years. The surplus to year ago and five-year average levels continues to narrow. The Baker Hughes rig count on Friday showed US natural gas rigs in operation were up 3 rigs to 99 last week. This was down from 116 rigs a year ago and below the five-year average of 119. Gas rigs are coming back on line as the surpluses narrow and US LNG facilities expand. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 23,163 contracts of natural gas for the week ending September 24, reducing their net short to 14,801. The NWS calls 6-10 and 8-14 day forecasts show normal to below normal temperatures across the eastern third of the country and above and much above normal in the west, which could support cooling demand for half of the nation.
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