Written Commentary
Wkly Futures Market Summary For 2.10.2025
February 10, 2025
CRUDE OIL
October Crude Oil fell to its lowest level since August 6 on reports that Israeli Prime Minister Netanyahu had accepted a “bridging proposal” presented by the US to tackle disagreements that are blocking a ceasefire proposal in Gaza. The market bounced off its low and was back near unchanged later this morning. Low demand expectations for China have helped send prices lower over the past seven sessions after lower imports were reported for July earlier this month and lower gasoline export by China were reported yesterday. For the weekly EIA supply report tomorrow, a Reuters poll has the trade looking for crude stocks to have fallen 2.9 million barrels for the week ending August 16, with gasoline stocks expected to be down 400,000 barrels and distillates up 200,000. Refinery runs are expected to be up 0.2% to 91.7%. As of August 9, US crude oil supply was 2% below a year ago and 5% below the five-year average. One supporting factor for prices may be the weaker dollar and increased expectations for a Fed rate cut in September.
PRODUCT MARKETS
October RBOB on ULSD followed crude oil lower overnight on news of potential progress for a Gaza cease fire, with October ROBB falling to its lowest level since February and October ULSD to the lowest since June 2023. Both have bounced off the lows back to unchanged or higher on the day. The complex market may have gotten overdone on that piece of bearish news, which just seems to open the door for a cease fire. On the other hand, other factors helping to push the market lower over the past week are still intact, especially expectations for weak demand in China.
NATURAL GAS
October Natural Gas saw a reversal higher yesterday and extended its gains slightly overnight. The market has managed a recovery bounce off its contract lows from early this month off a slight improvement in the US supply/demand balance and the possibility of a late-summer heat wave that could boost cooling demand for natural gas. The NWS 6-10 day forecast calls for above normal temperatures across the lower 48, from the Rockies and southwest to the east coast, with the biggest extremes centered over the Midwest, Great Lakes and new England and extending down to the southern Plains. US storage levels remain elevated versus a year ago, but the surpluses have narrowed over the past several weeks, and last week there was a rare decline for this time of year.
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