Written Commentary
CRUDE OIL
January Crude Oil is higher this morning as traders weigh the reopening of the government as well as the effects of the sanctions against Russian oil companies against what as being described as a burdensome supply setup. Stepped up production of Mideast oil appears ready to fill the void of Russian oil. Reuters reported that Saudi Arabia, Iraq and Kuwait will raise crude oil supplies to India in December, according to sources at four Indian refiners. Other traders also said that Chinese provincial government-backed refiner Yanchang Petroleum is avoiding Russian oil in its latest crude oil tender for deliveries between December and mid-February.
PRODUCTS
December RBOB extended its rally overnight to reached its highest level since June 23, and December ULSD is approaching last Friday’s two-year highs. The sanctions on Russian oil companies as well as damage to Russia’s oil infrastructure cause by Ukrainian drone hits have limited the availability of gasoline and diesel on the world market. Bulgaria reportedly has one month of gasoline supplies left as it braces for the start of sanctions on Russia’s Lukoil on November 21.
NATURAL GAS
January Natural Gas is higher today but is inside yesterday’s range. The wintry weather moving across the US this week is expected to give way to milder conditions, which may limit upward movement in the futures for the moment. However, the 6-10 and 8-12 day forecast are a little less warm today than they were yesterday. Above normal temps still dominate the from the eastern Plains to the East Coast but they are a little less above normal, and the below normal pattern in the west is expanding eastward. Weekly US storage injections have not been running consistently above year ago levels over the past several weeks the way they had been this summer and early fall.
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