Written Commentary
CRUDE OIL
February Crude Oil was lower early Monday but managed to reverse that and move to higher on the day as the session progressed. The market initially viewed the capture of Venezuelan President Maduro by US troops and remarks by US President Trump that the US intends to restore Venezuela oil production as negative for prices on ideas it would eventually lead to higher supply, but it will take some time to restore Venezuela’s capacity to where it was. The fact that Maduro loyalists remain in charge of Venezuela also suggests that it may be difficult for US oil companies to effect a change, but after first denouncing Maduro’s capture the acting president Delcy Rodriguez appeared less defiant on Sunday, saying it was a priority to have respectful relations with Washington. In the meantime, the state-run oil company PDVSA has begun cutting crude production because it is running out of storage capacity due to the US blockade.
PRODUCTS
February RBOB fell to its lowest level since April early Monday, but was higher on the day later in the session in line with action in crude oil. In similar fashion, February ULSD bounced off its October low. Last week’s EIA report was decidedly bearish for gasoline and diesel with US gasoline and distillate stocks climbing more than expected.
NATURAL GAS
March Natural Gas gapped lower early Monday and fell to its lowest level since July 2021. The nearby contract fell to its lowest level since October. Mild weather returning to the eastern US this week lowers demand expectations. The 6-10 day forecast shows above normal temperatures covering the northern US, with normal temps showing up in the southern half of Texas and the southeast. The 8-14 day has normal temps over most of the eastern US, but it is not below normal.
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