Written Commentary
CRUDE OIL
While the headline decline in US crude oil stocks this week was a definitively bullish supply side development, seeing US implied gasoline demand post an all-time high clearly boosts energy demand hopes and that has been the central theme of the bull camp for months. It should also be noted that gasoline stocks also declined by a startling 6 million barrels which in the face of an active 92.2% refinery operating rate, likely signals very good demand for US domestic crude oil ahead.
Seeing the gasoline market hold up better than the crude oil market yesterday was justified by the fundamentals with EIA and European (ARA) gasoline stocks continuing to drawdown in the face of an active US refinery operating rate in-excess-of 92%.
NATURAL GAS
We are a little surprised that the natural gas market did not forge more significant gains yesterday in the wake of a smaller than expected weekly EIA storage report injection. In fact, the smallish injection resulted in current inventories falling 6.9% below 5-year average storage levels. The bull camp continues to derive support from much above normal temperature pockets in the northwestern US and above normal temperatures throughout most of the northern 3rd of the continental United States.
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