Written Commentary
CRUDE OIL
November Crude Oil is higher this morning, near the upper end of a two-week trading range but still short of the monthly high. Ukraine’s ability to go after Russian oil infrastructure via drone attacks is starting to get attention by the oil markets and provide a distraction from the expectations for large supply from OPEC+. Goldman Sachs estimated that the Ukrainian attacks have taken out about 300,000 barrels per day of Russian refining capacity since August. The trade is expecting the US Fed to cut rates by 25 basis points this week, which has the potential to offer some demand support. Treasury Secretary Bessent said yesterday that the US government would not impose additional tariffs on Chinese goods unless European countries hit China and India with duties of their own, which seems to curtail any threats to Russian supply from US action. For the US inventory reports this week, the early Reuters poll has an average trade expectation calling for US crude oil stocks to be -1.6 million barrels for the week ending September 12, with gasoline stocks expected to be -100,000 barrels and distillates +400,000 barrels. Refinery runs are expected to be -0.5% to 94.4%.
NATURAL GAS
November Natural Gas is higher this morning after testing yesterday’s low overnight. The above normal temperatures expected across most of the lower 48 US states is supporting ideas of some late season cooling demand that would raise natural gas consumption pattern over the next week or so. The 6-10 and 8-14 day forecast has much above normal temperatures across the central part of the nation, including the far north. LSEG projected average gas demand in the Lower 48 states, including exports, to rise to 103.1 billion cubic feet per day next week from 102.5 billion this week. For the EIA storage report on Thursday, the early Reuters poll has a range of expectations calling for a net injection of 72 to 86 bcf for the week ending September 12. The 5-year average for the week is +69 bcf.
PRODUCTS
Product prices are higher this morning, outperforming crude oil to some degree. The early Reuters poll has an average trade expectation calling for US gasoline stocks expected to be down 100,000 barrels for the week ending September 12 and for distillates to be up 400,000 barrels. In last week’s report, gasoline stocks were 220.0 million barrels as of September 5, which was not too far off the 221.6 million a year prior nor the four-year average of 218.7 million. Gasoline stocks are on a seasonal decline. Overnight, November RBOB traded to its highest level since putting in a monthly high on September 3.
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