Written Commentary
CRUDE OIL
April Crude Oil reached a new high for the week early Friday but gave back some of those gains as the session progressed. The market has been bit higher this week on expectations that a US attack on Iran was likely. President Trump said on Thursday that “really bad things” would happen if Iran does not come to an agreement to curtail its nuclear program, but he also mentioned a deadline of 10 to 15 days, which may have made the attacks appear less imminent than they had prior to his comments. A primary concerns to oil traders is that Iran may respond to US attacks by closing the Strait of Hormuz, through which about 20% of global oil supply passes.
PRODUCTS
The size of the declines in EIA gasoline and distillate stocks last week were impressive given the larger than expected increase in refinery runs. This also implied strong demand for both. Gasoline stock remain at six-year seasonal highs but they saw their biggest one-week decline since October.
NATURAL GAS
Some colder, more seasonal weather is expected to move in over the weekend but gradually give way to a warmer trend next week. The 6-10 and 8-14 day forecasts show above and much above normal temperatures across most of the lower 48 states, which would limit heating demand as we move to the tail end of the season. Keep an eye on forecasts for the southern US, which appears to be the center point of the warmer than normal trend, because if temps get very warm, it could spark talk of increased cooling demand. US production continues to recover from the January low.
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