Written Commentary
CRUDE OIL
October Crude Oil was moderately lower early Wednesday following a sharp decline on Tuesday. News that Oman and Iran had reached an agreement on reopening the Strait of Hormuz added additional pressure to a market that sold off of Tuesday after the latest attempt by the US to sanction on buyers of Iranian crude was met with indifference. The reported agreement between Iran and Oman includes a “joint temporary navigational corridor” through the strait that would also include clearing the strait of mines. This essentially sidesteps US efforts to isolate Iran and suggests a willingness on the part of at least one Persian Gulf producer to cooperate with Iran.
PRODUCTS
Product prices were lower early Wednesday in line with softer crude oil, but downside is limited by the limitations in global refining capacity due to the damage done to operations in the Persian Gulf and Russia.
NATURAL GAS
October Natural Gas appears to be building a base in an attempt to establish a major low. US supply is holding steady with last year, as strong US production has offset cooling demand and steady LNG exports. The 6-10 and 8-14-day maps show above normal temperatures prevailing over most of the US lower 48 states, except for some below normal temperatures along the West Coast.
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