Written Commentary
CRUDE OIL
November Crude Oil rallied up to the 200-day moving average yesterday and it close to there this morning. Geopolitical concerns have reemerged to support the market this week, as Ukraine’s recent drone attacks on Russian oil infrastructure have drawn attention. Reuters reported on Tuesday that three industry sources said Russia’s oil pipeline monopoly Transneft had warned producers they might have to cut output following these attacks. Last night’s API report came in bullish against expectations for crude oil and gasoline and bearish for distillates. Reuters reported API US crude stocks were -3.42 million barrels for the week ending September 12 versus an average trade expectation for -900,000. Gasoline stocks were -691,000 barrels versus +100,000 expected, and distillates were +1.90 million versus +1.0 million expected. The EIA report will be released later this morning.
NATURAL GAS
November Natural Gas extended yesterday’s rally overnight and was back approaching last week’s highs. A warmer than normal trend for the US through the end of the month suggests a late season surge in cooling demand, but that may be more than offset by reduced heating demand in the northern states. US gas production is slipping a bit this month. LNG exports are off a bit as well. LSEG says average gas output in the lower 48 states has fallen to 107.4 billion cubic feet per day so far in September, down from a record 108.3 bcfd in August. The average amount of gas flowing to the eight big LNG export plants has fallen to 15.6 bcfd versus 15.8 bcfd in August.
PRODUCTS
Last night’s API report was bullish against expectations for and gasoline and bearish for distillates. Reuters reported API US gasoline stocks were -691,000 barrels versus +100,000 expected, and distillates were +1.90 million versus +1.0 million expected. The weekly EIA report will be released this morning. November RBOB and November ULSD pushed through their September 1 highs yesterday to reach their highest levels since July 31. November ULSD gave back a little less than half of yesterday’s gains overnight in the wake of the API numbers.
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