Written Commentary
CRUDE OIL
November Crude Oil is lower this morning as higher OPEC+ production is weighing against new attacks on Russian oil infrastructure and a sharp drop in US crude oil stocks in this week’s EIA report. Reuters reported yesterday that freight rates for Very Large Crude Carriers soared to their highest in more than two years, based on industry sources and LSEG data. This is being attributed to the increase in Middle East exports and more supplies moving to Asia. Data from Kpler indicated exports from the Middle East in September are set to exceed 18 million barrels per day for the first time since April 2023. They also reported that Asia’s “robust” demand is also pulling arbitrage supplies from the Atlantic Basin
NATURAL GAS
November Natural Gas declined yesterday on the back of a bigger-than-expected injection into US supply last week and is lower again the morning. The above normal temperature forecast for the most of the US through into the beginning of October could will support electricity demand for A/C, but it will also limit heating demand. The weekly EIA gas storage report came in above expectations this week and was well above the average pace, and this has narrowed the deficit to a year ago and has widened the surplus relative to the five-year average. The report showed storage for the week ending September 12 at 3,433 bcf, +90 bcf from the previous week. This was above the average trade expectation of +80 and above the range of expectations from +70 to +88 Storage was down 0.5% from a year ago and 5.9% above the five-year average versus -1.3% and +5.7% the previous week.
PRODUCTS
Product prices are moderately lower this morning but in line with crude oil. Warm weather in the US will limit demand for ULSD over the next two weeks.
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