Written Commentary
CRUDE OIL
The rally in the petroleum complex continues to be very impressive considering that the gains came in the face of a patently bearish weekly EIA report, surging infection fears and a hawkish shift in US Federal Reserve policies. In addition to a much smaller than expected crude stocks decline, all 3 main product inventory readings showed noted inflows. Furthermore, gasoline stocks jumped by a significant 10 million barrels while implied gasoline demand came in at the lowest level since February. Therefore, the petroleum complex is still showing “bullish resiliency”.
Like the crude oil market, the gasoline market has moved higher despite patently bearish weekly EIA inventory and demand figures and in the face of deteriorating energy demand expectations. In fact, despite an 8.5% rise in weekly Singapore fuel stocks, the largest weekly inventory increase of the EIA weekly report and implied gasoline demand falling from 9.7 million barrels per day to 8.1 million barrels per day the RBOB market is remains strong.
NATURAL GAS
For the most part, the natural gas market has continued to waffle around the midpoint of the last 30 days trading range. US temperature forecasts favor the bear camp into the middle of the month and expectations for this week’s storage withdrawal also favor the bear camp. Apparently, the weekly Reuters storage report poll has targeted only 54 BCF as the anticipated decline.
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