Written Commentary
CRUDE OIL
Crude oil extended its rebound with an outside-day higher close on Thursday, but it has lost upside momentum and is on track for a second negative weekly result in a row. While it received some bullish domestic supply/demand news late this week, crude oil may need another flare-up in Middle East tensions to see a large-scale rally from current price levels. A comment from President Trump that the US does not need to make a deal with Iran boosted energy market risk premiums by extending Persian Gulf uncertainty and potentially allowing both nations to continue military action against each other. OPEC’s monthly update kept its 2026 and 2027 global crude oil demand growth forecasts unchanged from September, while the International Energy Agency cut both its 2026 and 2027 demand growth forecasts by 100,000 barrels per day (bpd). OPEC’s October production increased by 1.93 million bpd from September, with most of that uptick coming from Saudi Arabia, Iraq, and Kuwait. The EIA’s latest Weekly Petroleum Status report showed a larger-than-expected increase in crude oil stocks, but it also showed an increase in refinery utilization despite the seasonal trend for maintenance operations. There was also a significant weekly decline in US crude oil exports, reflecting weaker foreign demand for US energy supply, but it had negligible impact on the market.
PRODUCTS
Both product markets were able to lift clear of this week’s lows on Thursday, but RBOB and ULSD remain near the bottom end of their November downtrends. ULSD has received a boost from a shipment of Russian diesel unable to find a US buyer, leaving East Coast supply mildly tighter than expected. The EIA report showed larger-than-expected weekly increases in gasoline and distillate stocks, while US distillate exports at 1.198 million bpd fell to the lowest level since March. While implied gasoline demand saw a minimal weekly downtick of 41,000 bpd, implied distillate demand fell by 1.028 million bpd and reached a 9-week low.
NATURAL GAS
Natural gas prices have found early pressure this morning, but they have consolidated their November gains and are on course for a sizable weekly gain. If there are no bearish surprises from today’s domestic supply/demand data, natural gas should go into the weekend on an upbeat note. Natural gas extended its November rebound as forecasts show cooler temperatures in the Eastern US. After a mild start to the North American winter heating season, more seasonal temperatures should improve power plant demand for natural gas and underpin prices. The EIA projected US LNG exports at 17.6 billion cubic feet (bcf) per day this year and 19.0 bcf next year, and the outlook for stronger foreign demand for US LNG production has been a key factor in the November natural gas recovery move
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