Written Commentary
CRUDE OIL
October Crude Oil was respecting Thursday’s contract highs early Friday. At Thursday’s high the market had gained $13.52 (+17%) in six sessions off a resumption of hostilities between the US and Iran this week. The US government maintains that Middle East oil flows have returned to near normal levels, but ship tracking data does not back that up. Energy Secretary Chris Wright told CNBC on Wednesday that more 17 million barrels of oil transited the Strait of Hormuz on Wednesday under US military protection. This compares to about 20 million barrels per day before the war started. Bloomberg, citing data from TankerTrackers.com, reported that over the 28 days ending Wednesday, a daily average of 7.5 million of barrels of crude oil was exported from the Persian Gulf past the US blockade, 5 million bpd through the Strait of Hormuz and the rest from oil terminals along the Gulf of Oman. Preliminary data showed four commodity vessels transited the strait Thursday, well below the 10-day average of 15.
NATURAL GAS
October Natural Gas higher early Friday but inside Thursday’s range. The closed lower on Thursday after reaching an 8-week high, which may keep the market from resuming its so far modest uptrend for a while. US weekly gas storage builds have been running below normal the past few weeks, as unseasonably warm weather has boosted cooling consumption, but this has not been enough to seriously dent US supply. The EIA gas storage report on Thursday was on the bullish side of expectations, and the market peaked for the day right after it was released. The reports showed storage for the week ending August 28 at 3,214 billion cubic feet, +30 bcf from the previous week versus and average trade expectation from a Reuters poll of +31 (range +21 to +40). Storage was -1.8% from a year ago and +4.8% from the five-year average versus -1.0% and +5.0% the previous week. The weekly change was below the five-year for this week of +37, which could reflect strong cooling demand but also an increase in flows to US LNG plants.
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.
