Oil prices had a quick dip in Thursday trading after the rumored demise of terrorist Yahya Ibrahim Hassan Sinwar the latest of Hamas to meet his maker.
The killing of Sinwar raised hopes for a moment that the death of the architect of the heinous and horrendous Oct. 7 attacks on innocent civilians in Isreal might lead to the release of Israeli hostages and a full and unconditional surrender by the Hamas terror group.
Of course, those hopes are being met with healthy skepticism. It was reported that Israeli Prime Minister Benjamin Netanyahu has declared that the war in Gaza is “not over”. Netanyahu said “Today, evil has suffered a heavy blow, but the task before us is not yet complete.” Benny Gantz, the leader of the right National Unity party, agreed with him.
President Biden called for a ceasefire after the Hamas leader’s death yesterday. It’s time for us to make peace and prevent a wider war.
And oil still awaits the coming response by Israel against Iran for its record-breaking missile barrage on Israel. Iran also is the major funder of what’s left of Hamas, so Israel still sees Iran as a legitimate target.
The reports about promises by Israel to not attack Iran’s oil infrastructure reduced the oil risk premium by about five dollars a barrel. Yet any Israeli attack on Iran may put that premium back in quickly.
Global and US oil inventories continue to fall despite demand weakness in China. The Business Times reported that diesel exports from China have fallen to the lowest level since June 2023, as refiners grappled with a limited shipment quota and near break-even margins.
Cargoes dropped to 350,000 tonnes last month, customs data showed on Friday (Oct 18). This is less than half the level in August, and 71 per cent below the level in September 2023. There were 730,000 tonnes of petroleum exported – the least since April.
Refiners in Asia’s swing exporter of petroleum products have been hurt by a slowdown in nationwide growth, as well as the gradual decarbonization of the country’s transport fleet.
Yet US demand is hot, and oil inventories are still below normal.
The Energy Information Administration (EIA) reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.2 million barrels from the previous week. At 420.5 million barrels, U.S. crude oil inventories are about 5% below the five-year average for this time of year.
Total motor gasoline inventories decreased by 2.2 million barrels from last week and are about 4% below the five-year average for this time of year.
Distillate fuel inventories decreased by 3.5 million barrels last week and are about 10% below the five-year average for this time of year.
Total product demand based on products supplied over the last four-week period averaged 20.8 million barrels a day, up by 2.8% from the same period last year.
Over the past four weeks, the motor gasoline demand averaged 9.0 million barrels a day, up by 5.4% from the same period last year.
Distillate fuel demand averaged 4.0 million barrels a day over the past four weeks, up by 0.2% from the same period last year.
Jet fuel supplied was up 10.4% compared with the same four-week period last year.
So stronger demand and lower supply. What did they used to say about that in ECON 101? I don’t remember.
Another storm system could catch the Natural Gas Market's attention so download the Fox Weather app to keep an eye on this storms development.
Fox Weather reported that the development odds increase again for Caribbean disturbance 95L.
Both disturbances have a low chance of development, but those odds have slowly been increasing for the newly designated Invest 95L in the western Caribbean Sea. Forecasters with the National Hurricane Center (NHC) are continuing to monitor the progress of Invest 94L in the Atlantic and have now designated a disturbance in the western Caribbean Sea as Invest 95L, which could develop into a tropical depression or tropical storm near Central America.
Natural gas also say an injection was lower than anticipated but it only gave a little support as weather forecasts suggest that the next week will see weak demand.
The EIA reported that working gas in storage was 3,705 Bcf as of Friday, October 11, 2024, according to EIA estimates. This represents a net increase of 76 Bcf from the previous week. Stocks were 107 Bcf higher than last year at this time and 163 Bcf above the five-year average of 3,542 Bcf. At 3,705 Bcf, the total working gas is within the five-year historical range.