Written Commentary
CRUDE OIL
April Crude Oil is lower this morning and has started to give ups its gains from Tuesday when the market rallied off news that a Russian oil pipeline pumping station had been damaged by a Ukrainian drone strike. The Caspian Pipeline Consortium and Russian President Putin have been saying that oil flows in the pipeline have been reduced by 30%-40%. The pipeline is a major route for crude exports from Kazakhstan, but Russian news agency Interfax reported today that flows from Kazakhstan’s Tengiz oilfield via were uninterrupted, which depends on the pipeline, were interrupted. The blow-up earlier this week between Trump and Zelenskiy had traders questioning the chances of a cease-fire agreement, but Ukrainian President Zelenskiy pledged yesterday that they were ready to work quickly to produce a strong agreement on investments and security with the United States after a meeting with US envoy Keith Kellogg. The EIA report yesterday was bearish against expectations for crude oil but was supportive to ULSD with distillate stocks falling more than expected last week. Distillate stocks are the lowest they have been at this point in the season in at least six years, as cold weather is supporting heating oil demand in the Northeast.
NATURAL GAS
April Natural Gas is higher but inside yesterday’s wide range this morning. The market fell back yesterday after reaching an new high for the move earlier in the session. EIA Gas storage for the week ending February 14 was 2,101 bcf, -196 bcf from 2,297 the previous week. Storage was down -14.9% from a year ago and -5.1% below the five-year average versus deficits of -9.2% and -2.0% the previous week. Storage has reached its biggest deficit to year ago levels since June 2022. The cold weather in the US has expectations for further strong drawdowns in coming reports. The European Union energy commissioner said that the EU will seek more gas from countries including the US to replace Russian supplies. He said Brussels was preparing changes to permit rules to speed up building renewable energy. World Weather Service said expects the polar vortex to be anchored near Hudson Bay in northeastern Canada next week and into March, which will likely to make Eastern Canada, the Great Lakes region and northeastern US a bit colder biased for an extended period of time. A brief bout of warming is expected next week.
PRODUCT MARKETS
Distillate stocks are the lowest they have been at this point in the season in at least six years, as cold weather is supporting heating oil demand in the Northeast.
>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.
