Written Commentary
The Ghost in the Machine Q4 2024
November 15, 2024
NATURAL GAS
January Natural Gas opened sharply lower yesterday to a new contract low only to reverse and close sharply higher on the session, as sellers seemed to reach some sort of exhaustion. The weather forecast is showing a cooler trend in the west that has gradually pushed east of the Rocky Mountains, but the eastern two-thirds is above normal. This may be a little bit less bearish than last week. For the EIA storage report this week, a Reuters survey has analysts looking for a build of 38-76 bcf. Europe’s LNG imports rose in October for the first time in 10 months, while Asian imports dropped for the first time since June. Europe’s increase more than offset Asia’s decline. European imports totaled 7.54 million tons, up 1.17 million from September. Asia imported 24.36 million tons, down 0.36 million from September.
CRUDE OIL
December Crude Oil was slightly higher overnight, extending its rally from yesterday in the wake of the OPEC+ announcement that it would postpone planned production increased. Reuters estimated that OPEC production reached 26.33 million barrel per day in October, up 195,000 from September. They cited Libya’s return to full production after settling a dispute over the head of the central bank. Venezuela also increased output to 860,000 bpd, the highest since at least 2020. Both are exempt from agreements to limit production. Tehran has approved a plan to boost Iranian output by 250,000 bpd. Iran is talking about a complex and strong retaliation to Israel’s attack in late October. Israel avoided Iran’s oil infrastructure in the strike but reportedly causes significant damage to the missile and defense capability. For the US inventory reports this week, a Reuters survey has an average traded expectation calling for a 1.8 million-barrel increase in crude oil stocks, with gasoline stocks expected to be down 1.7 million barrels and distillates down 1.5 million. Refinery runs are expected to be down 0.2% to 88.9%. The trade is also awaiting China’s National Peoples Congress meeting this week for any more news about their planned stimulus measures.
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