Written Commentary
CRUDE OIL
October Crude Oil was lower early Monday as the market awaited detail on the newest round of sanctions on Iran and received hints that indirect talks may be once again underway between the US and Iran. Pakistan’s army chief Asim Munir, who has built a rapport with President Trump reportedly arrived in Iran on Monday for talks. US Treasury Secretary Bessen will hold a press conference at 1:00 US eastern time today to present details of the sanction. On Sunday he told the press that US would target “fearful nations” that practice “appeasement” by engaging with Iran’s economy and financial system. Iran for its part vowed to shut down all oil exports from the Gulf “if the economic war continues.” This Iranian currency, the rial currency reached a new record low against the dollar on Monday.
PRODUCTS
Product prices are following crude oil lower this morning after reaching contract highs last week, as the market awaits more details on the sanctions and digests reports that Pakistan is at least attempting to restart talks, perhaps with tacit approval from Iran and the US.
NATURAL GAS
October Natural Gas was higher early Monday and reached its highest level since July 23. The market may be trying to establish a low ahead of the build season. The Baker Hughes rig count showed US natural gas rigs in operation were down 1 rig to 127 last week. This was up from 122 rigs a year ago and above the five-year average of 119. The forecasts show above normal temperatures over the middle two-thirds of the US next week, which could help support end- of season cooling demand and offer some offset to record US natural gas production. LSEG said average gas output in the US Lower 48 states has reached 111.5 billion cubic feet per day so far in August, up from a record of 110.7 bcfd in July.
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