Written Commentary
Ag Market View for Dec 13.24
December 13, 2024
CRUDE OIL
August Crude Oil is lower today on optimism regarding peace talks in Gaza but it is may be finding some support on uncertainty regarding Hurricane Beryl. The storm made landfall today at Matagorda, Texas, about half way between Corpus Christi and Galveston, as a Category 1 hurricane. It is expected to weaken rapidly as it moves up into Texas. The ports of Galveston, Corpus Christi, Houston, Freeport and others closed on Sunday, and there are concerns about interruptions in port and refinery operations. As this morning, 300,000 homes in Texas had lost power. The Baker Hughes oil rig count was steady last week at 479, which is the lowest since December 2021. EIA crude oil stocks fell 12.2 million barrels in last week’s report versus -0.7 million expected, but the market failed to test the April high on the news.
PRODUCT MARKETS
August RBOB seemed to get a lot of bullish news thrown at it last week, only to sell off on Friday. The implied gasoline demand number was the highest since last November, but last week was being touted as the “peak demand” weekend of the season. So far, it does not appear that refinery operations will be affected too much by the hurricane, but the trade will be watching its progress as it moves inland.
NATURAL GAS
August Natural Gas gapped lower overnight but recovered to trade higher on the day. Hurricane Beryl made landfall this morning about halfway between Corpus Christi and Galveston and is expected to weaken rapidly as it moves north. Ports were closed yesterday in anticipation of the storm, and its progress will be watched closely. Maximum sustained winds were 80 mph. High temperatures have returned to the forecast for the central part of the lower 48 after a moderate/cool spell over the weekend and early this week. The 6-10 day forecast has well above normal temperatures across the northern three-fifths of the nation and above normal elsewhere. The 8-14-day is not as hot but still well above normal. The generally hot weather this summer could help pull down burdensome supplies. Last week’s EIA report showed US storage was up 9.6% from a year ago and 18.8% above the five-year average. The Baker Hughes ga rig count rose by 4 last week to 101, which was the first increase in seven weeks.
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