Written Commentary
CRUDE OIL
January Crude Oil is near unchanged this morning but it is holding in the upper part of yesterday’s range-up action. The market turned positive yesterday on an escalation in hostilities in the Russia/Ukraine war on reports that the Biden administration had given Ukraine the go-ahead on launching US-made missiles into Russia, and that was followed by a report overnight that Ukraine had made its strike inside Russia. In response, Putin has updated Moscow’s military policy and nuclear doctrine, saying it could respond with nuclear weapons if it was subject to a conventional missile attack that was supported by a nuclear power. This is NOT the first time Putin has threatened the use of nuclear weapons in this conflict. Oil prices also found support yesterday on the news that output at Norway’s giant John Sverdrup oilfield had been halted due to an onshore power outage. The platform was back two-thirds capacity by this morning. US crude oil has moved into contango for the first time since February, if only for the December-January switch. The December contract expires tomorrow.
PRODUCT MARKETS
A record 80 million Americans are expected to travel for the Thanksgiving holiday, according to AAA, which could show up in US EIA inventory and implied usage numbers for both gasoline and distillates in the weeks to come.
NATURAL GAS
January Natural Gas is lower this morning but inside yesterday’s range. The market yesterday approached last week’s three-week high but failed to take it out, and that level, 3.234, could be a key bull bear line today. World Weather Service says warmer to much warmer temperatures will be most common through the next two weeks, but there will be areas of colder than normal temperatures through the period. Much of the Midwest and the Delta to the northeastern U.S. will be much warmer than normal Tuesday through Friday while most other areas are near to above normal. The northwestern Plains will be colder than normal as well the southeastern corner of the country. The Great Lakes region to the remainder of the northeastern U.S. will be warmer than normal with the western U.S. to the west-central and southern Plains to the Delta warmer to much warmer than normal. The 6-10 and 8-10 forecasts show cooler than normal air dominating the northwestern half of the lower 48.
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