Written Commentary
The Ghost in the Machine Q3 2025
October 6, 2025
CRUDE OIL
December Crude Oil inched below yesterday’s low overnight but was back inside yesterday’s range. The API report yesterday came in bullish across the board but it did not spark much of a reaction, as traders may be turning more skeptical that the US sanctions on Russian oil majors will work or at least feel there is enough of a cushion in global supply now that OPEC+ has posted production this year. API crude oil stocks were reported by Reuters to be -4.02 million barrels for the week ending October 24 versus an average trade expectation from the Reuters poll calling for a decline of 200,000. Gasoline stocks were -6.35 million barrels versus -1.9 million expected, and distillates were -4.36 million versus -1.7 million expected. Perhaps a bullish result from the EIA report later this morning will be enough of a confirmation to spark a rally.
NATURAL GAS
January Natural gas extended yesterday’s selloff overnight and fell to its lowest level since October 17, the day it put in a 3 ½ year low. The weather forecast has turned bearish, with above normal temps creeping back into the western Midwest following a brief trend of normal/below normal temps in the eastern part of the lower 48. This return to mild/warm conditions points to lower than normal gas consumption for home heating.
PRODUCTS
The products had mixed reactions overnight despite what appeared to be a bullish API report that showed US gasoline stocks -6.35 million barrels last week versus -1.9 million expected and distillates -4.36 million vs -1.7 million expected. December RBOB is near unchanged this morning and is holding near the recent highs, while ULSD is under a bit more pressure. Weather forecasts have turned milder for the eastern US, which lowers prospects for heating demand for ULSD.
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