Written Commentary
CRUDE OIL
Given a surprising delay in returning Gulf of Mexico oil production, the bull camp appears to have maintained a measure of control through this week’s initial downside corrective action. Aiding the bullish track this morning is a disruption of oil tanker loading at a Libyan port because of protests, widening reports that global road traffic is recovering quickly, and larger than expected declines in API gasoline and distillate stocks.
NATURAL GAS
To summarize the aggressive rally this week, the natural gas market is reacting to pre-existing fears that natural gas supplies in the northern hemisphere (particularly the US and Europe) are poised to enter the winter heating season at very tight levels, there continues to be delays in returning Gulf gas production and that provides supply and demand buying interest. While not a significant hindrance to the return of Gulf gas production, it should be noted that a tropical storm traversed the eastern portion of offshore production area and that probably complicated restoration efforts.
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