Written Commentary
CRUDE OIL
May Crude Oil was slightly lower early Wednesday but inside the upper half of Tuesday’s action that saw the market move to new contract highs. News that the US Navy could begin escorting oil tankers through the Strait of Hormuz if necessary and that the US would provide financing assistance to maritime trade in the Persian Gulf, may have eased supply concerns somewhat, but traffic through the Strait remains essentially closed. Some shipping sources told Reuters that the plan may fall short of calming shippers as long as the fighting continues because the US has a limited number of ships that could escort tankers. Asian refiners dependent on Middle East crude are expected to cut output soon because they are unable to get prompt replacement cargoes. Iraq has cut its crude production by nearly 1.5 million barrels a day due to storage limits and the lack of an export route.
PRODUCTS
Product prices were near unchanged early Wednesday after pushing through Tuesday’s highs overnight. The market may have seen some late pressure from crude oil on hopes that US Naval escorts through the Strait of Hormuz would ease fears of tight supplies.
NATURAL GAS
May Natural Gas was lower early Wednesday and had given back more than half of the gains from last week’s low. QatarEnergy has declared force majeure on shipments of liquefied natural gas. On Monday they said they was halting production of LNG and associated products due to attacks on facilities. The nation represent about 20% of global LNG supply, while the US is the world’s biggest exporter.
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