Written Commentary
The Ghost in the Machine Q3 2025
October 6, 2025
CRUDE OIL
December Crude Oil is slightly lower this morning but inside yesterday’s range as traders came away from the talks between Presidents Trump and Xi a bit disappointed that there was no big deal announced. President Trump did agree to lower tariffs on China to 47% from 57% in a one-year deal in exchange for Beijing resuming US soybean purchases, keeping rare earths exports flowing and cracking down on the illicit trade of fentanyl. The fact that the two sides are talking provides some lift to the economic outlook. OPEC+ is scheduled to meet on Sunday to discuss December quotas, and sources tell Reuters that they will announce another 137,000 barrels per day increase. Crude price have set back this week as the trade has considered the impact of the latest round of US sanctions on Russia’s two biggest oil producers. There seems to be some sort of effect short term in India, as Reuters reported yesterday that state-run Indian Oil was seeking more crude from the Americas and that Mangalore Refinery and Petrochemicals had purchased Abu Dhabi crude to replace Russian oil.
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NATURAL GAS
December Natural Gas is higher this morning after falling to its lowest level since October 17 yesterday. The weather forecast for the lower 48 states has turned warmer, keeping near term heating demand needs limited. The 6-10-day forecast has above normal temps from the west coast to the Ohio, with near normal elsewhere except for some below normal temps in New England.
PRODUCTS
Yesterday’s EIA report was bullish for gasoline and diesel, as it showed US gasoline stocks falling 5.9 million barrels last week versus expectations for a decline of 1.9 million and distillate stocks down 3.4 million barrels versus a drop of 1.7 million expected. US gasoline stocks are the lowest since 2022, and distillate stocks are the lowest since 2023. Implied gasoline demand at 8.924 million bpd was an improvement over 8.454 million the previous week but still down from 9.159 million a year ago. Implied distillate demand at 3.580 million bpd was lower than 3.847 million the previous week and 3.881 million a year ago.
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