Written Commentary
CRUDE OIL
While the bull camp should be very disappointed with the price action in the petroleum complex yesterday following a very bullish headline EIA crude oil stock decline, fundamental news overnight was supportive, and prices have responded positively. Fresh bullish overnight developments include ongoing concerns for restricted US oil production from the hurricane (reportedly 80% of US Gulf output remained shut as of yesterday), evidence that Russian oil output declined last month, and ongoing strength in global equities.
Despite reports that total US petroleum product demand hit a record high and estimates that 1.7 mbd of Louisiana refining will be held back this month, gasoline prices favored the downside following the EIA report and remain 9 cents off the hurricane high. Apparently, consumption in the US is up roughly 1 million barrels per day over the prior week which equates to a 4.6% jump on a week over week basis.
NATURAL GAS
With a massive range up extension in gas prices on Wednesday, it is likely that some measure of the recent net spec and fund short of 128,581 contracts were covered with buy stops. While it is a reach it is possible that the presence of several tropical waves/depressions in the Atlantic are prompting fresh speculative buying.
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