Written Commentary
CRUDE OIL
October Crude Oil was lower early Wednesday after reaching a new contract high earlier in the session. The market has seen a jump this week after US renewed its attacks on Iran this week after a several-week pause, and Iran reacted with attacks of its own. Iran’s Revolutionary Guards claimed that two oil tankers hit sea mines and were disabled while attempting to transit the Strait of Hormuz. US Central Command said Tuesday evening that it had completed the latest barrage against Iranian military targets, and this suggestion of a pause may have slowed the panic buying . US Energy Secretary Wright said on Tuesday that 17 million barrels of oil transited the strait on Monday, saying it marked the highest level of crude through their since the Iran war had reduced flows.
PRODUCTS
Like crude oil, RBOB and ULSD both reached new contract highs overnight. Product prices have been supported on limited refinery capacity, However, Reuters reports that Chinese refiners are expected to export slightly more than 4 million metric tons of gasoline, diesel and jet fuel in September, which suggests at least a chance that global product supply shortages could level off.
NATURAL GAS
October Natural Gas was higher early Wednesday, and it was still in a modest uptrend off the August contract lows despite a lower close on Tuesday. Freeport LNG’s export plant in Texas was on track to pull in around 1.9 bcfd of feedgas on Tuesday, down from an average of 2.1 bcfd over the previous five days, likely due the arrival of Tropical Storm Edouard, and this may have pressured the market. LSEG said average gas output in the US lower 48 states rose to a record 111.5 billion cubic feet per day in August, up from the previous all-time high of 110.7 bcfd from July.
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