Written Commentary
CRUDE OIL
September Crude Oil was higher early Tuesday on reports that a Saudi-flagged crude oil tanker suffered damage near the Strait of Hormuz and that Iran’s Revolutionary Guards had fired missiles at ships moving through the strait overnight. This comes after Iran’s foreign minister threatened to back away from talks and President Donald Trump’s threatened to “finish the job” unless a deal is done. The reaction in the market has been relatively muted, as the market is also confronted with more reports of tankers be moving through the strait. Reuters reported that shipping data showed two more Japanese-owned supertankers carrying Saudi oil were exiting the Strait of Hormuz on Tuesday.
NATURAL GAS
August Natural Gas reached its highest level since June 30 early Tuesday but was seeing volatile action and a wide range. The market likely rallied off news that a Qatari LNG tanker suffered significant damage after it was hit as it travelled through the Omani side of the Strait of Hormuz overnight, following report that Iran’s Revolutionary Guards was firing missiles at ships moving thought the strait. The worst of the heat wave over the US has abated, but the 6-10 and 8-14 day forecasts still show above normal temperatures across the lower 48 states, which should at least provide steady cooling demand.
PRODUCTS
Product prices turned lower early Tuesday after reaching new highs for the move earlier in the session. August RBOB and ULSD are still in uptrends, as US supply remains relatively tight. For the inventory reports this week, the early Reuters poll has an average expectation for US gasoline stocks to be -1.6 million barrels for the week ending July 3, and distillate stocks are expected to be +1.0 million
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