Written Commentary
CRUDE OIL
April Crude Oil is lower this morning as geopolitical worries took a step back after Iran apparently pledged to show flexibility during the third round of talks with US representative in Geneva that began Thursday morning. Reports that Saudi Arabia is increasing its oil production and exports as part of a contingency plan in case of a US strike have eased some of the anxiety. The cost of hiring a very large crude carrier to ship 2 million barrels from the Middle East to China exceeded $200,000 a day on Thursday for the first time since 2020, according to LSEG data showed, which also indicates increased movement of oil ahead of a possible strike. Expectations that OPEC+ will consider raising its oil output by 137,000 barrels per day for April when they meet on Sunday could also be pressuring the market.
PRODUCTS
The EIA report on Wednesday showed US gasoline stocks fell a bit more than expected during the week ending February 20 , and distillate stocks increased instead of decreasing. Implied distillate demand was 958,000 barrels per day below the previous week. Gasoline stocks are coming off record highs (for at least the past six years).
NATURAL GAS
April Natural Gas was lower early Thursday and was moving deeper into the gap from January 20, when the market began to take off on the extreme cold event that arrived later that month. The 6-10 and 8-14-day maps show above normal temperatures covering all of the lower 48 states, with the exception of near normal in northern New England in the 6-10-day (and some below-normal in the northern tip of Maine). For the EIA gas storage report today, the Reuters poll has an average expectations calling for a net draw 55 billion cubic feet last week (range –34 to -90).
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