Written Commentary
CRUDE OIL
October Crude Oil was near unchanged overnight after setting back from Monday’s three week highs yesterday. The rally off concerns about the potential for a wider war in the Middle East has taken a pause, with Iran yet to act on threats to retaliate for the killing of a Hamas leader in Tehran. Iran has reportedly suggested that renewed cease-fire talks with Hamas could prevent a retaliation. The weekly API report late yesterday showed US crude oil stocks falling 5.2 million barrels last week versus trade expectations for a 2.0 million barrel decline. The EIA report will be released later today. Trade expectations call for gasoline stocks to be down 1.1 million barrels and distillates down 1.8 million. Refinery utilization is expected to be up 0.7% from 90.5% last week. From the way the market reacted to the larger than expected API stocks, it doesn’t appear to be too focused on the inventory report this week. Last week’s report showed US refinery operations at 90.5% from 95.4% in early July. Earlier this week, IEA lowered its 2025 oil consumption growth expectations and OPEC lowered their expectations for 2024, both based on reduced demand from China.
PRODUCT MARKETS
Trade expectations for today’s inventory reports call for US gasoline stocks to be down 1.1 million barrels last week and distillates down 1.8 million. A move above 2.4364 in October RBOB would leave the next upside target at 2.4783. look for support at 2.3693.
NATURAL GAS
October Natural Gas was higher overnight after a modest setback yesterday. Weather forecasts for next week call for a mix of cooler than normal conditions around the Central Midwest, the Great Lakes, and West Coast, with above normal from the Rockies to the Great Plains and across the South. For the EIA storage report this week, a Reuters poll has expectations ranging from -3 bcf to +26. Last week’s report showed stocks still running ahead of a year ago and the five-year average, but injections have slowed in recent weeks, and the surpluses have narrowed. Yesterday Reuters reported that intense fighting between Ukrainian and Russian forces near a pipeline Russia uses to supply European countries with gas had not disrupted supplies
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