Oil & Gas Prices - Mar 26

[dan_s]

Trading Economics (around noon):
"WTI crude futures steadied above $81.5 per barrel (APR24 contract), following a 1.6% gain in the previous session as investors assessed the impact of recent Ukrainian attacks on Russian refinery capacity, while a slightly weaker US dollar provided some support. The Russian government ordered oil companies to reduce their output in the second quarter to meet an OPEC target of 9 million barrels per day after producing about 9.5 million bpd in February. Ukrainian attacks on Russian oil refineries also affected about 12% of the country’s oil processing capacity. In the Middle East, the UN Security Council passed a resolution calling for a ceasefire between Israel and Hamas, although analysts were doubtful that it would stop Houthi attacks on Red Sea shipping that disrupted supply routes. Elsewhere, investors look forward to key inflation reports in major economies this week for clues on the path for monetary policy globally."

"Natural gas prices in the US have remained low at around $1.8/MMBtu (MAY24 is now the front month) due to sluggish demand and a surplus of domestic supply. The Freeport LNG export plant in Texas has announced that two of its three liquefaction trains will be offline until May, prolonging the period of reduced capacity. This has limited the country's ability to export natural gas, leading to an increase in domestic supply levels. Additionally, relatively low consumption due to a tame winter, near record-high gas production, strong hydropower output, and ample beginning stocks drove current natural gas storage to be more than 41% above the five-year average in late March, according to weekly data from the EIA. The report also showed that US utilities built their inventories for the first time since November to likely end the seasonal inventory depletion."

Q1 oil prices will be above what I've used in my forecast models by ~$3/bbl. Q1 natural gas prices will come in below what I used in the forecast by ~$0.10/mcf.