Written Commentary
CRUDE OIL
September Crude Oil was lower overnight as the latest tariff threats from the US have undermined global energy demand expectations. The market has also come up short of achieving a 0.382 retracement of the two day selloff rom the June peak, and this may encourage selling today. OPEC’s latest demand forecasts today call for world oil demand to average 105 million barrels per day for 2025, 106.3 million in 2026, and 111.6 million bpd by 2029. The 2026 figure is down from 108 million forecast last year. Their long term forecast calls for demand to reach 113.3 million bpd by 2030 versus a peak of 105.9 million by 2029 forecast by the International Energy Agency. The market was pressured a bit yesterday by the EIA report, which came in bearish against expectations for crude oil and bullish for gasoline and diesel. Crude oil stocks were up 7.1 million barrels last week versus expectations for a 2.1-million-barrel decline. Distillate and gasoline stocks fell more than expected.
NATURAL GAS
September Natural Gas is higher this morning following a selloff yesterday that took the market to its lowest level since December. A cooler trend for the nation’s mid-section points to lower cooling demand ahead. The 6-10-day forecast calls for below normal temperatures from the eastern Rockies to the central Midwest with above normal in the PNW and along the eastern two-thirds of the nation. The 8-14 day has a preponderance of normal or below normal temps, with above normal dominating the PNW and northern Rockies. No heat dome in sight. For the EIA gas storage report today, the Reuters poll has an average expectations calling for US storage to show a net injection of 58 billion cubic feet for the week ending July 4 (range +44 to +66).
PRODUCTS
The EIA report yesterday showed US distillate stocks fell 800,000 barrels last week, which puts them at their lowest level in at least six years. Implied gasoline demand recovered last week and is running around average levels for this time of year.
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