Written Commentary
CRUDE OIL
March Crude Oil was lower early Tuesday, extending the recent selloff and falling to its lowest level since September 4. President Trump has continued to downplay the possibility of new military strikes on Iran and that and more evidence the Mideast supply is recovering despite the blockages at the Strait of Hormuz are sending prices lower. Reuters reports the OPEC crude output reached 22.87 million barrels per day in October versus the 25.48 million bpd that the 11 current members produced in February. Russian and Ukrainian officials are to meet today for two days of US-brokered talks in Abu Dhabi, their first since February.
PRODUCTS
Product prices were lower sharply lower early Tuesday, led by lower crude oil prices and reports of OPEC output reaching 90% of pre-war levels. Also, the talks between Russian and Ukraine officials for the first time since February at least offers some limited hope that some sort of peace could emerge, which could ease the pressure on global product supplies. China’s oil imports in October reached their highest level since March, which suggests they could export more products in the coming months as well.
NATURAL GAS
January Natural Gas was extended Monday’s rally and reached its highest level since October 21 overnight. Lower US output this month has lifted the market off its October lows, and a turn to more seasonal weather has added support as well. LSEG said on Monday that average gas output in the US Lower 48 states has fallen to 112.1 billion cubic feet per day (bcfd) so far in November, down from 113.4 bcfd in October.
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