Written Commentary
CRUDE OIL
October Crude Oil is lower this morning but inside yesterday’s range. Optimism about a potential peace deal in Ukraine lowers the odds of the US imposing stricter sanctions on Russian crude oil exports, but clearly there is a lot that has to be worked out before an agreement is reached. On the other hand, the expansion in OPEC+ production adds a cushion to global supply, which would diminish the effect of the sanctions anyway. At any rate, the threat has been postponed. A report that Indonesia plans to build a network of small modular refineries to process US and domestic oil and aiming to reduce gasoline imports could support US crude oil exports.
NATURAL GAS
October Natural Gas is lower this morning after running into resistance at the 9-day moving average overnight. Weather forecasts are calling for a cool-down next week in the eastern half of the US that will lower cooling needs, not that US production is having difficulty keeping up with demand. LSEG said yesterday that average gas output in the lower 48 states has risen to 108.2 billion cubic feet per day so far in August, up from a record 107.9 bcfd in July.
PRODUCTS
Traders are looking or a 1.0 million barrel decline in US gasoline stocks and a 400,000-barrel increase in distillate stocks. October ULSD fell through the 100-day moving average yesterday and to a two-month low yesterday, but it bounced and closed higher on the day.
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