Written Commentary
CRUDE OIL
October Crude Oil was near unchanged early Monday, as the was still no change in the stalemate between the US and Iran and no progress on talks to reopen the Strait of Hormuz. The US Defense Secretary said on Thursday that the US it could maintain its naval blockade of Iran indefinitely, and the Treasury Secretary said the US planned to inflict more financial damage on Iran. Two vessels from the state-owned Abu Dhabi National Oil Company were attacked transiting the strait on Thursday evening. Sources report that about 8-12 vessels per day are traveling through the strait versus 130-140/day prior to the war. On the bearish side, the market is digesting the sharp increase in US crude oil stock this week, the biggest since January 6, 2023.
PRODUCTS
October RBOB and October USLD were both lower early Friday, as the market stepped back from this week’s highs. Ukraine and Russia stepping up their attacks on each other’s grain export facilities may reduce some pressure on global product supply, but don’t count on it. Global diesel supplies have tightened after Russia banned exports in the wake of Ukrainian drone stocks in recent months.
NATURAL GAS
October Natural Gas was higher early Friday following a decline on Thursday off a bearish EIA storage report. The report showed US gas storage for the week ending August 7 was 3,153 bcf, +36 bcf from the previous week. This was above the average trade expectation of +32 and at the upper end of the range of expectations from +26 to +36. Storage was -1.0% from a year ago and +6.4% above the five-year average versus -0.4% and +6.3% the previous week. US production remains strong, with LSEG estimating average gas output in the lower 48 states at 111.2 billion cubic feet per day (bcfd) so far this month, up from a previous record 110.7 bcfd in July.
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