Written Commentary
CRUDE OIL
News that Chinese refiners have suspended exports of oil products to regions beyond Hong Kong and Macau until further notice from Beijing supported the petroleum complex early Thursday. China had been drawing on stocks accumulated before the war started in March, but imports have risen during the past two months, reaching nearly 9 million bpd in August, and traders this week have noted aggressive bidding on their part. Iran said on Wednesday that it had received a US response to its latest proposal to resurrect the collapsed ceasefire in the Gulf. An official briefed on the talks, who is not Iranian and spoke to Reuters on condition of anonymity, said the two sides largely agreed about the steps that are needed but were still in disagreement over the about the order in which to take them. The EIA report on Wednesday came in bearish for crude and bullish for gasoline and the products.
PRODUCTS
Product prices were mixed early Thursday, with November RBOB reaching its highest level since the contract-high day on September 26 and November ULSD lower but inside Wednesday’s range. The Trump administration has apparently told Germany and France to draw down emergency diesel inventories to help ease global fuel prices or face a potential US diesel export ban. The White House is considering regulatory relief that would expand sales of red-dyed diesel, a tax-exempt fuel typically used for farming, to transportation use, but critics warn that it would do little ease high prices and could mean less fuel available to farmers during harvest.
NATURAL GAS
November Natural Gas was lower early Thursday for the fifth straight session following a sharp rally to a 12-week high last week, putting the market back in the vicinity of contract lows. it did manage to close a gap from September 11 on the selloff, and this may provide some technical support with that downside objective having been met.. LSEG said average gas output in the US Lower 48 states averaged 112.2 billion cubic feet per day in September, down from a record 112.3 bcfd in August.
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