Written Commentary
CRUDE OIL
June Crude Oil bounced off a six-session low early Wednesday and to higher on the day. The market was under pressure early on indications from the Trump Administration that peace negotiations would resume in Pakistan this week following disappointing results over the weekend. However, the US military saying its blockade had completely halted trade going into and out of Iran by sea may have countered some of that optimism. On the other hand, others view the blockade as boosting the US negotiating position going into the next meetings. The US will not renew a 30-day waiver of sanctions on Iranian oil at sea that expires this week, and it let a similar waiver on sanctions on Russian oil expire over the weekend. The strong performance in the US stock market and the fact that oil prices did not surge to new highs in the wake of the lack of progress in the peace talks over the weekend has raised talk that investors think the Iran war is basically over, and a key reversal on the weekly chart last week adds to ideas that a top may be in.
NATURAL GAS
June Natural Gas was holding above Tuesday’s low early Wednesday but just barely. Mild weather in the US has the trade expecting another larger than normal injection into US supply this week. For the EIA gas storage report on Thursday, the early Reuters poll expectations calling a net injection of 49 to 65 billion cubic feet for the week ending April 10. The five-year average change is +28 bcf (range +15 to 57). LSEG said average gas output in the US Lower 48 states has risen to 110.9 billion cubic feet per day so far in April, up from 110.4 bcfd in March and a record 110.7 bcfd in December.
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