Written Commentary
CRUDE OIL
March Crude Oil was higher early Tuesday on a new level of global uncertainty over the Greenland issue, though it its difficult to see how a renewed trade war would be beneficial to crude prices. The dollar collapsed, which does translate to higher crude oil prices. China’s economy grew 5.0% last year, meeting the government’s target, which is viewed as supportive to oil demand. The Baker Hughes rig count showed US oil rigs in operation were up 1 rig to 410 last week.
PRODUCTS
Product prices were higher overnight, particularly diesel, which benefited from a cold wave settling in over the eastern two-thirds of the US that supports heating demand. The 6-10 and 8-14 days forecast show much below normal temperatures, and the bitter cold this week will grab traders’ attention. Gasoline prices reversed higher today, and the March contract has an outside day higher going.
NATURAL GAS
March Natural Gas gapped higher early Tuesday and quickly rallied to its highest level since December 31, as winter appears to have finally arrived to the US. The latest 6-10-day forecast has below normal temperatures over the eastern two-thirds of the lower 48 US states, with much below temps from Illinois eastward. The west is above normal. World Weather Inc. says temperatures will slip to near -40F in Canada and into -30s in the far northern Plains, with subzero temps into the central Midwest and single digit lows into the Ohio River Valley and central Plains. This could, like last year, reverse the below normal consumption pattern that has been pressuring the market over the past six weeks. The Baker Hughes rig count showed US natural gas rigs in operation were down 2 rigs to 122 last week.
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