Written Commentary
CRUDE OIL
October Crude Oil traded to another new contract high early Thursday, extending this week’s rally off the resumption of hostilities between the US and Iran, thus making the potential for a negotiated agreement on reopening the Strait of Hormuz even more remote. Statements from the US that that strait is open have been contradicted by data suggesting traffic remains very low. Reuters reported that preliminary data from Kpler indicated 6 commodity vessels transited the strait on Wednesday, down from 11 a day earlier and well below the 10-day average of around 13.
PRODUCTS
Product prices are lagging crude oil for a change, with neither market making a new high for the move early Thursday despite crude oil doing so. Perhaps Putin’s suggestion of a being open to peace negotiations offered hopes for an eventual recovery in Russian refining capability.
NATURAL GAS
October Natural Gas gapped higher early Thursday and reached its highest level since July 9, as the trade seems to be turning more bullish on LNG export demand. There has been a boost in flows to LNG plants this month after a relatively slow period over the summer. LSEG reported on Wednesday that average gas flows to the nine big US LNG export plants were running around 18.0 bcfd so far this month, up from 17.2 bcfd in August.
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