Oil & Gas Prices - Jan 25

[dan_s]

At noon ET
> WTI up $1.52 at $76.61/bbl.
> HH Ngas down $0.01 at $2.63/MMBtu

Trading Economics:
Oil
"WTI crude futures surged to over $76 per barrel on Thursday, nearing a two-month high after data showed US crude stocks declined sharply. US crude oil inventories plummeted by 9.233 million barrels in the week ending January 19th, marking the biggest drop since August and surpassing market expectations of a 2.15 million barrel decline, according to the EIA Petroleum Status Report. Additionally, China's move to reduce banks' reserve ratio next month to support its struggling economy further contributed to the optimistic market sentiment. Finally, concerns over supply disruptions persisted, with a US and UK coalition launching strikes against Houthi fighters in Yemen, who have been targeting commercial shipping in the Red Sea."

Natural Gas
"US natural gas futures steadied at around $2.6/MMBtu after an 8% increase following the EIA's storage draw report. Government data showed US utilities pulled 326 billion cubic feet of natural gas from storage last week, compared with market expectations of a 322 bcf draw. It was the largest weekly decrease since February 2021 due to high gas demand caused by extreme cold. The report also showed gas in storage remains 5.2% above the seasonal norm. Looking ahead, heating demand is expected to remain subdued as meteorologists predict above-average temperatures until at least February 7. Nevertheless, slow return of output remains after wells and other equipment froze in last week's Arctic freeze. Also, the amount of gas being sent to US liquefied natural gas (LNG) export plants continued to rise." < Joe Bastardi's forecast is that the last three weeks of February will be much colder than last year. If he's right, storage should be near the 5-year average heading into April.

MY TAKE:
> As Fear of Recession fades, oil prices will drift higher.
> Oil demand is seasonal and demand for transportation fuels goes way up as spring weather arrives.
> Biden Administration will be forced to deal with Iran when their proxies kill U.S. soldiers. How many good men & women must die before Old Joe is forced to act?
> China's economy will be fine.
> Paper Traders are still stuck with lots on long positions in natural gas. Only another major cold wave in February will save them.