Written Commentary
NATURAL GAS
March Natural Gas fell to its lowest level since March 2022 early Tuesday and the nearby contract fell to its lowest level since October as a warmup forecast for the US through December 29 and the (modestly) improved chances for peace in Ukraine weigh on the market. The 6-10 and 8-14 day forecasts show above normal temperatures across most of the lower 48, with the only below normal temps in New England and the northern reaches of the PNW, Plains and Midwest, near the Canadian border.
CRUDE OIL
February Crude Oil fell to its lowest level since May early Tuesday, as it fell under pressure on new optimism regarding peace in Ukraine. A US official told reporters later that under the peace deal being discussed in Berlin, Ukraine would receive security guarantees similar to those provided in Article 5 of the NATO treaty, which requires the alliance to come to the defense of any member that comes under attack. The US envoy made an the offer but warned it would not be on the table forever. Several European leaders expressed optimism, with German Chancellor Merz posting that the possibility of a cease fire is conceivable for the first time since the war began.
PRODUCTS
For the weekly petroleum stocks reports, the early Reuters poll has an average expectation calling for US gasoline and distillate stocks to be +2.1 million last week.
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