Written Commentary
CRUDE OIL
December Crude Oil was higher early Wednesday with the Houthis keeping up their attacks on Saudi Arabia and increasing expectations for the US to resume attacks on Iran after the mid-term elections. Houthi spokesmen said on Tuesday they had hit Saudi Arabia’s largest oil refinery with a ballistic missile. Saudi authorities did not immediately confirm the strike. The Houthis also said they had attacked Saudi military aircraft and repelled an advance by Saudi-backed forces near the Bab el-Mandeb Strait, an important Red Sea shipping route. This came a day after officials from Saudi Arabia, Turkey and Pakistan met with Iranian officials in Tehran, reportedly to discuss lowering the tensions.
PRODUCTS
Product prices were higher early Wednesday but were lagging crude oil as the market seemed less bulled-up by the possibility of renewed military action by the US post-election nor by the ongoing Houthi attacks on Saudi Arabia. Peak driving season has passed, and the heating season is off to a slow start with the mild temps in the Northeast. ULSD reached a new high on Monday failed to follow through. Diesel support from the ag sector may have already peaked with the advancement in the harvest. However, US stocks of diesel and gasoline remain near historic lows for this point in the season.
NATURAL GAS
December Natural Gas was higher early Wednesday after a nine-session, 17% decline that took the December contract to its lowest level since August 2021 and the nearby prices to its lowest level since April on Monday. US production is coming back after some interruptions from pipeline problems last week, but flows to LNG plants are recovering as well. Seasonal heating demand is off to a slow start due to the mild weather. US supply is 4.3% below a year ago and a mere 0.4% above the five-year average, so there is not a huge cushion of supply, should the weather pattern change.
Interested in more futures markets? Explore our Market Dashboards here.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
