Written Commentary
CRUDE OIL
September Crude Oil extended this week’s losses overnight but is bouncing around unchanged (and the 100-day moving average) this morning. The latest round of US tariffs went into effect yesterday, which puts some pressure on crude oil on ideas that it will lower economic activity and therefore pressure demand. On the other hand, if the tariffs manage to curb sales of Russian crude to India as intended, this could tighten global supply. News this week that President Trump will meet with Russian President Putin pressured the market this week, and now the trade is speculating on the likelihood that the two will reach some sort of agreement regarding the Ukraine war that cause Trump to ease off on the pressure on India. So far the Indian government has rejected any idea that they are ceding to Trump’s demand that they stop buying the Russian crude, but Indian state oil companies paused such purchases in late July. Sources told Reuters that in its latest tender, one of the state firms bought 2 million barrels of US crude, 2 million barrels of Brazilian grades, and another 1 million barrels of Libyan crude. Trump has also said that China could be hit with similar tariffs if they do not suspend purchase of Russian crude oil. Saudi Arabia raised its September crude oil prices for Asian buyers for the second month in a row this week.
NATURAL GAS
September Natural Gas saw a brief rally yesterday off a supporting EIA storage report but closed lower on the day and extended those losses slightly overnight. The NWS 6-10 and 8-14 day forecasts show above and much above normal temperatures across the lower 48 states, but some cooler temperatures are starting to show up out west, and the peak cooling demand season is passing. US natural gas supply did tighten for a change last week, EIA Gas storage came in below expectations and below the five-year average for only the second time since April. Storage is now down 4.3% from a year ago and but 5.7% above the average.
PRODUCTS
September RBOB fell to the 100-day moving average overnight and has held above the level so far.
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