Oil & Gas Prices - Feb 9

[dan_s]

Trading Economics' Opening Comments
WTI
> WTI crude futures held above $76 per barrel on Friday and were set to advance nearly 6% this week as persistent geopolitical tensions in the Middle East continued to drive up oil prices.
> On Thursday, WTI prices jumped more than 3% as Israeli Prime Minister Benjamin Netanyahu rejected a ceasefire proposal by Hamas, with Israeli forces turning the focus of their offensive to the southern border city of Rafah.
> The US also carried out a strike on Wednesday that killed a commander from Kataib Hezbollah, an Iran-backed armed group in Iraq.
> On the demand side, official data showed that US gasoline inventories declined by 3.15 million barrels last week, far exceeding forecasts for a 140,000 barrel draw.
> US crude stockpiles rose 5.5 million barrels during the same period, above market expectations for a 1.895 million barrel build. < Primarily because of increased imports and low refinery utilization rate.

HH Natural Gas
> US natural gas futures are down more than 12% to $1.82/MMBtu this week, the lowest level since September 2020 as production is returning to near-record levels after gas wells resumed operations following the severe cold in mid-January.
> Technical problems at Freeport LNG's export plant have restricted gas flow to the nation's LNG export facilities, and record levels are not expected until the plant returns to full power.
> Government data showed US utilities pulled 75 billion cubic feet (bcf) of gas out of storage last week, significantly less than the 217 bcf withdrawn during the same week last year. The report also showed gas in storage remains 10.6% above the seasonal norm.
> Looking ahead, meteorological forecasts suggest temperatures will remain above average until February 15, before declining to mostly near- to below-normal levels from February 16-23. < It will take an extended period of colder than normal weather to get U.S. ngas storage down to the 5-year average by the end of March.

Propane
> Propane prices at the Mont Belvieu distribution hub in Texas dropped $0.01 to $0.90 per gallon, easing from nearly 1-1/2 year high on February 1st, as investors capitalized on profits.
> Signs of decreased supply helped stabilize the bearish market after winter storm in January returned long-running high inventories from 5-year peaks to normal levels.
> According to the latest EIA data, US propane inventories declined to 60.6 million barrels on the week to February 2nd, below 68.9 million barrels in the same period year earlier and marking the lowest reading since the end of April 2023.
> Still, the El Niño phenomenon and the return to warmer-than-normal temperatures across the US until the mid-February weighed on the propane price.
Increased export capacity has significantly improved the outlook for propane and all LPG prices.