Written Commentary
CRUDE OIL
March Crude Oil was lower early Thursday as geopolitical concerns eased with regards to Greenland, Iran and Ukraine. On Wednesday, Trump ruled out the use of force to acquire Greenland, said his administration would not be imposing the tariffs against Europe that had been scheduled to go in effect February 1, and he said that they had reached a framework of a deal with respect to Greenland. He also said he hoped there would be no further US military action in Iran. Trump also said he believed that they were “reasonably close” to a deal to end the war between Russia and Ukraine. The frigid temperatures forecast for the eastern two-thirds of the country late this week could temporarily slow refinery operations in the Gulf as well as in the Northeast and Chicago areas.
PRODUCTS
Product prices were moderately lower early Thursday, in line with the setback in crude oil off an easing of geopolitical concerns.
NATURAL GAS
March Natural Gas was sharply higher early Thursday for the third straight session as the eastern two-thirds of the US prepare for frigid weather this weekend that promises to boost demand and also threatens to lower output at some wells due to “freeze-offs,” which occur when liquids in the wellhead get too cold and block production. The colder than normal weather is expected to stick around for a while, with the 6-10 and 8-14-day forecasts calling for below and much below normal temperatures from the Great Plains eastward, from north to south all the way out to February 4. This is could bring US supply back to deficit from a year ago.
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