Written Commentary
The Ghost in the Machine Q3 2025
October 6, 2025
CRUDE OIL
December Crude Oil is higher this morning after falling to its lowest level in 5 ½ months yesterday. There may be some relief after US Treasury Secretary Bessent said that he expects to meet with Chinese Vice Premier He Lifeng in Malaysia to try to forestall an escalation of US tariffs on Chinese goods. This comes after President Trump confirmed that he would meet with Chinese President Xi in South Korea in two weeks, thus pulling us back from the brink of a full scale trade war with China that threatens to undermine crude oil demand even. The market has also been focused on the shift towards a carry market from the January contract out into next year, which is a bearish setup. For the petroleum stocks reports this week, the early Reuters poll is calling for US crude oil stocks to be +1.5 million barrels for the week ending October 17. Gasoline stocks are expected to be -1.3 million barrels and distillate stocks -1.9 million.
NATURAL GAS
December Natural Gas extended yesterday’s rally overnight to trade to its highest level since October 8. Yesterday the market gapped higher in an apparent rejection of last week’s lows. The warm weather pattern that has delayed the start of the heating season in the US took a somewhat cooler turn over the weekend. The 6-10 day forecast still shows above normal temperatures across most of the US out through October 30, but a normal trend develops in the eastern Midwest in the 8-14 day forecast. Another factor is the recovery in LNG demand. LSEG reports that the average amount of gas flowing to the eight big US LNG export plants has risen to 16.4 bcfd so far in October, which will beat the previous record 16.0 bcfd from April if the strong pace continues. For the EIA gas storage report this week, the early Reuters poll is calling for US storage to show a net in injection of 76 to 83 billion cubic feet for the week ending October 17.
PRODUCTS
For the petroleum stocks reports this week, the early Reuters poll is calling for US gasoline stocks to be -1.3 million barrels for the week ending October 17 and distillate stocks -1.9 million. No change is expected for refinery activity, which would leave it at 85.7%.
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