Written Commentary
CRUDE OIL
April Crude Oil is higher this morning after testing last week’s low overnight. News that Ukrainian drones had attacked a pipeline in Russia that pumps about 1% of global crude supply lent support. A Russian oil transport company official said the damage could reduce oil transit volumes from Kazakhstan by about 30% and take up to two months to correct. US and Russian officials are meeting today in Saudi Arabia for their first talks on ending the war in Ukraine. Saudi Arabia’s crude oil exports fell 1% in December to 6.146 million barrels per day from 6.206 million in November. Saudi production fell to its lowest since June at 8.905 million bpd, down from 8.925 million in November. The Baker Hughes rig count showed US oil rigs in operation were up 1 rig to 481 last week. This was down from 497 rigs a year ago and below the five-year average of 521.4. Friday’s Commitments of Traders Report showed managed money traders were net sellers of 18,303 contracts of crude oil for the week ending February 11, reducing their net long to 122,237.
NATURAL GAS
April Natural Gas is lower this morning but has bounced off its lows. Dutch and British wholesale gas prices have been under pressure recently as the weather has warmed up in Europe. US prices are very low at the moment, but are expected to warm up over the next couple of weeks. The 6-10-day forecast shows above and much above normal temperatures in the western half of the US with mostly normal east (except for the southeast which is below normal) , and the warmth extends eastward in the 8-14 day. The Baker Hughes rig count showed US natural gas rigs in operation were up 1 rig to 101 last week. This was down from 121 rigs a year ago and below the five-year average of 119.4. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 25,867 contracts of natural gas for the week ending February 11, increasing their net long to 73,781.
PRODUCT MARKETS
Friday’s Commitments of Traders Report showed managed money traders were net buyers of 1,910 contracts of RBOB for the week ending February 11, increasing their net long to 48,683. For ULSD, managed money traders were net buyers of 7,785 contracts, increasing their net long to 13,865.
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