Written Commentary
CRUDE OIL
January Crude Oil is sharply lower this morning on reports of a US proposal to end the Russia/Ukraine war. A senior Ukrainian official told Reuters that they have received “signals” about a set of US proposals that Washington has discussed with Russia. Ukrainian President Zelenskiy will hold talks in Turkey on Wednesday and meet US Army officials in Kyiv on Thursday . In addition, the API report last night showed US crude oil stocks were +4.45 million barrels for the week ending November 14 versus expectations for a decline of 600,000 from a Reuters poll this week. Gasoline stocks were +1.55 million barrels versus a decline of 200,000 expected, and distillate stocks were +577,000 versus -1.2 million expected.
PRODUCTS
Like crude oil, RBOB and ULSD turned sharply lower this morning on the news of the US peace proposals for the Russia/Ukraine war. The API report was bearish as well, with gasoline stocks up 1.55 million barrels versus -200,000 expected and distillate stocks up 577,000 versus -1.2 million expected. Finnish petrol station operator, Teboil, which is owned by Russian oil major Lukoil, said it is preparing to shut down all its gas stations in the country as fuel runs out amid US sanctions.
NATURAL GAS
A cooler weather forecast for the US has sparked a sharp reversal in the natural gas market since yesterday. The NWS 8-14 day forecast shows below normal temperatures from the west coast to the central Midwest, with normal temperatures across the Great Lakes states to the upper Atlantic and New England out to December 2. This is quite a difference from the predominantly above-normal temperatures this week. Sudden Stratospheric Warming is disrupting the Polar Vortex, and weather forecaster are suggesting this could lead to colder weather in North America during early December.
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