CRUDE OIL
February Crude Oil is lower this morning after opening at a five-week high overnight. Chinese retail sales for November were weaker than expected, pressuring global equities and reigniting concerns about Chinese oil demand. Industrial output growth increased in November, but the trade seemed more focused on retail sales. However, Chinese refinery throughput in November was the equivalent of 14.24 million barrels per day, up from 14.02 million in October and the first monthly increase since April. The Baker Hughes rig count showed US oil rigs in operation were unchanged at 482 rigs last week. This was down from 501 rigs a year ago and below the five-year average of 504. The EU has adopted a new set of sanctions against Russia, adding 52 ships to the list of those used to circumvent Western restrictions to move oil, arms and grain. This sanctions also include Chinese entities involved in the trade. Friday’s Commitments of Traders Report showed managed money traders were net sellers of 12,447 contracts of crude oil for the week ending December 10, reducing their net long to 103,986.
NATURAL GAS
With mild weather expected to remain dominant in the lower 48 US states over the next couple of weeks, US gas supply could remain relatively high. The 6-10 day forecast has below normal temperatures east of the Mississippi and getting further east. A normal to above normal pattern extends westward, with much above normal expected from the western Plains to the West Coast. However, the 8-14-day has the warm weather covering almost the entire lower 48, with some much above normal temperatures expected in the northern Plains and Midwest. The below normal temperatures disappear altogether, with portions of the southeast seeing a near normal pattern. The warming trend would limit the seasonal drawdown in US supply. The Baker Hughes rig count showed US natural gas rigs in operation were up 1 rig to 103 last week. This was down from 119 rigs a year ago and below the five-year average of 117. Friday’s Commitments of Traders Report showed managed money traders were net sellers of 6,838 contracts of natural gas for the week ending December 10, increasing their net short to 79,556.
PRODUCT MARKETS
Friday’s Commitments of Traders Report showed managed money traders were net buyers of 6,546 contracts of RBOB for the week ending December 10, increasing their net long to 73,037.
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