Written Commentary
CRUDE OIL
January Crude Oil is lower this morning on apparent progress in a peace deal for Ukraine. A US official told CBS news that Ukraine’s government had agreed to a deal brokered by the Trump administration, and Ukraine’s national security adviser Rustem Umerov said a common understanding on a proposal had been reached, with details still to be worked out. Umerov added that Ukrainian President Zelenskiy could visit the US by the end of the month. The next step in the process is a meeting between US and Russian officials, and how they react to the current agreement could determine the next move. A report from Deutsche Bank on Monday said they expect a oil surplus of at least 2 million barrels per day in 2026 and “no clear path” back to deficits, even by 2027. Russian Deputy Prime Minister Alexander Novak said on Tuesday that Moscow and Beijing have been discussing ways to expand Russian oil exports to China.
PRODUCTS
Product prices both extended their recent selloffs overnight on the reports that Ukraine has agreed to a peace deal being brokered by the US. The peace proposals are hitting the products particularly hard, as Ukrainian drone attacks on Russian oil refineries have tightened global supplies of gasoline and diesel, and the latest sanctions on Russian oil companies have force them to find buyers for the refineries that they control in foreign countries.
NATURAL GAS
January Natural Gas was significantly lower overnight despite a forecast for colder than normal weather across much of the US heating region out through December 8. News that Ukraine had tentatively agreed to a peace proposal being brokered by the US may have had something to do with that, is peace would open up the possibility of more gas supplies from Russia. The NWS 30-day outlook issued on November 20 showed below normal to normal temperature across the northern half of the US with above normal south, which would a change from the above normal pattern that has dominated this fall.
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