Written Commentary
CRUDE OIL
December Crude Oil extended yesterday’s selloff overnight to its lowest level since May 5. Yesterday’s announcement that President Trump and Russian President Putin have agreed to meet in Budapest within the next couple of weeks could open the door for US sanctions on Russian crude to be lifted. In the meantime Ukrainian President Zelinskiy is to meet with Trump in Washington today to push for more military support, including U.S.-made long-range Tomahawk missiles. White House officials have maintained that India agreed to cut it purchases of Russian oil by 50%, but there has be no confirmation from the Indian government. Reuters reports that refiners have already placed orders for November and possibly December, which mean that the cuts would not be visible occur until December or January.
NATURAL GAS
December Natural Gas fell to a new low for the move overnight as warmer than normal conditions in the US continue to point to a slow start for the heating season. The latest 6-10-day forecast has some below normal temperatures emerging in the mid-Atlantic states, which is a bit more supportive than yesterday, but warmer than normal temp continue to dominate the middle part of the US. Yesterday’s EIA Storage Report was slightly bullish against expectations, as the build in US storage was just below the average guess and the 5-year average for the week. Nonetheless, storage was 3.8% above the five year average and slightly above year-ago readings
PRODUCTS
Yesterday’s EIA stocks report was bullish against expectations for diesel and neutral gasoline. However, implied gasoline demand was down from last week and a year ago, and the fact that there was only a slight decline in stocks even though there was a 6.7% drop in refinery operations last might be considered even more bearish. December RBOB fell to its lowest level since June 2 overnight.
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