Written Commentary
CRUDE OIL
April Crude Oil was higher early Friday as anxiety over the global oil supply continued. Nearby prices have reached their highest level since April 2024, and some in the press are warning that they could eventually top the $130 level that came in the wake of the Russian invasion of Ukraine. Shipping traffic through the Strait of Hormuz has ground to a halt, and there were reports that maritime insurance premiums for war coverage increase by more than 1000% in some cases. Qatar’s Energy Minister said they expect all Gulf energy producers to shut down exports within weeks if the Iran conflict continues. Kuwait and the United Arab Emirates may be the next inline as storage is limited and tanks are filling up. The US has issued a 30-day waiver on Thursday to allow India to buy Russian oil currently stuck at sea. This week, China, Thailand, and Vietnam suspended or halted exports of oil products due to uncertainty of crude supply.
PRODUCTS
New highs for the products as well this morning, as global prices soar on the interruption of roughly 20% of suppl through the Strait of Hormuz. The strong rallies this week may invite some profit taking today.
NATURAL GAS
May Natural Gas is higher this morning but still short of Tuesday’s four-week high. IS prices in the US have not reacted much to the Iran war and Qatar’s suspension of LNG shipments because the 1) US is not dependent on importing Mideast supply and 2) because the US is already exporting all the LNG it can produce. More tankers carrying liquefied natural gas are being diverted towards Asia. US gas futures are about 5% higher this week versus +70% for ICE Europe futures. Europe’s storage levels are low to begin with, and they will need to rebuild supplies aggressively this summer.
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