Written Commentary
PRODUCTS
RBOB had a larger than expected draw in API stocks and it appeared to benefit from that news overnight, as it was near unchanged while crude and ULSD others were sharply lower. ULSD gapped lower and was holding its losses. The EIA report this morning could change the picture if in contradicts the API numbers. Both markets have given back half their gains from Tuesday’s rally.
CRUDE OIL
October Crude Oil gapped lower overnight and fell to its lowest levels since August 21, as the notion that OPEC+ will consider further production at their meeting this Sunday gained traction. Russian Deputy Prime Minister Alexander Novak said on today that there is no set agenda for the meeting. News that Russia’s largest oil producer Rosneft has secured an additional deal on supply of 2.5 million metric tons of oil per year to China via Kazakhstan was also negative, as this is viewed as another way for Russia to sidestep western sanctions on their oil sales. The API report yesterday afternoon was negative for crude oil, with stocks +622,000 barrels for the week ending August 29 versus expectations from a Reuters poll calling for -2.0 million. The gasoline number was bullish at -4.58 million vs -1.1 million expected, but distillate stocks were bearish at +3.69 million vs -600,00 expected. The EIA report will be released today due to the holiday on Monday, and in addition to the expectations shown here, refinery runs are expected to be -0.5% to 94.1%.
NATURAL GAS
October Natural Gas is higher this morning and is approaching yesterday’s four week high. One supportive factor may be a dip in US gas production this month. LSEG said average gas output in the Lower 48 states fell to 107.4 billion cubic feet per day so far in September from a record 108.3 bcfd in August. The corrective rally has continued ahead of today’s EIA storage report, for which the Reuters poll has an average trade expectation for storage to be +56 bcf last week (range +45 to +65). The five-year average change for this week is +31 bcf (range +13 to +54). After a summer of above-average builds in supply, weekly supply increases have slowed, with three of the past four weeks coming in below average levels. A Reuters report said US power developers are planning to focus on natural gas and hydropower generation capacity and are cutting back on plans to for solar and wind farms. As of mid-2025, US power developers had just over 114,000 megawatts of natural gas capacity under construction or in pre-construction (according to data from Global Energy Monitor0, more than twice what was in being planned a year ago. Natural gas plants make up around 46% of currently operational US power capacity, and 36% of capacity in construction or pre-construction.
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