Written Commentary
CRUDE OIL
Crude Oil was back in positive territory early Friday, breaking out of a week-long consolidation to reach another new contract high. Market expectations that the US will resume strikes on Iran after next week’s mid-term elections are outweighing mediators’ attempts this week towards resuming peace negotiations, which so far appear to have been nonstarters. Reuters was told that Qatari mediators were back in Tehran today. Reports of another tanker being hit the Strait of Hormuz overnight is another reminder that restoring flows out the Persian Gulf carries considerable risk and keeps shipping and insurance costs high.
PRODUCTS
Products followed crude oil higher early Friday today but they were not making new contract highs. Reuters reported that Russia plans to its diesel export ban until the end of the year while allowing some companies to ship fuel to meet its export commitment to the US
NATURAL GAS
December Natural Gas was lower overnight, resuming the selloff after a brief recovery this week. US production has recovered after a slowdown earlier this month, and mild weather points to slow heating demand in the US. Thursday’s weekly gas storage report came in in above the upper end of the range of expectations and with a net build that was above the 5-year average. Storage for the week ending October 23 was 3,724 bcf, +80 bcf from the previous week versus an average trade expectation of +69 and range of expectations from +61 to +76.
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