Written Commentary
CRUDE OIL
December Crude Oil is near unchanged this morning, holding yesterday’s mild gains off the mildly bullish news that OPEC+ increased their November production target by 137,000 barrels per day, the same as the increase in October and less than some had expected. OPEC+ did not discuss increasing quotas after November, according to Russian Deputy Prime Minister Alexander Novak. The word yesterday was that Saudi Arabia would have liked to have increased the quotas more and that Russia resisted. OPEC+ has increased its oil output targets by more than 2.7 million bpd this year, equivalent to about 2.5% of global demand, and this has traders concerned about a potential “flood of supply” later this fall.
NATURAL GAS
US weather is trending a little cooler this week, particularly out west, and the highs in the Midwest are in the 60’s and 70’s, rather than the 80’s. However, the 6-10 and 8-14-day forecasts show much above normal temperatures across the eastern two-thirds of the lower 48 states with normal and below normal out west. This leaves room for more cooling demand in the south and heating demand in the northwest, but it does not appear that the key natural gas/heating regions will not need to fire up their furnaces for a while. There are reports that Europe is looking for more US LNG exports, and Ukraine’s energy minister said today that the country wants to increase its imports of natural gas by 30% after Russian airstrikes on its gas infrastructure
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