Oil & Gas Prices - Feb 16

[dan_s]

Trading Economics
Crude Oil
"WTI crude futures settled at $79.19 per barrel on Friday, touching the highest level since November and poised to mark gains for the second consecutive week. Geopolitical tensions in the Middle East and efforts by OPEC+ to restrict oil supply provided support to oil prices. Additionally, oil prices climbed over 1% on Thursday following weaker-than-expected US retail sales data, which triggered a dollar selloff. However, the International Energy Agency (IEA) cautioned in its monthly report that global oil demand is losing steam, citing a significant decline in Chinese demand. The IEA revised its 2024 global oil demand forecast to 1.22 million barrels per day from the previous estimate of 1.24 million bpd. Furthermore, it anticipated a supply increase of 1.7 million bpd this year, surpassing its prior projection of 1.5 million bpd."
MY TAKE: The U.S. EIA says that U.S. oil production growth is peaking and may rollover later this year. IEA still forecasts a U.S. supply increase. IEA also continues its practice of under-stating oil demand growth."

Natural Gas
"US natural gas futures edged up to $1.6/MMBtu on Friday due to expectations of reduced output in 2024 following a significant price drop. Considering the full week, US natgas prices tumbled nearly 13% and touched their lowest since June 2020 at $1.59/MMBtu, after the EIA reported a smaller-than-expected storage draw. Government figures showed US utilities pulled 49 billion cubic feet of natural gas from storage, less than market expectations of a 67 bcf draw as warmer-than-normal weather kept heating demand low. The report also showed gas in storage is 15.9% above the seasonal norm. At the same time, the ongoing shutdown of a liquefaction unit at Freeport LNG's export plant in Texas means more gas will remain in the country. Moreover, meteorologists predict that the weather will continue to be milder than normal until March 1."
MY TAKE: Not much near-term upside for ngas prices in the U.S. and Canada unless winter weather drags on into April. I do think the large-cap gassers will tap the brakes on their drilling programs and lots of drilled wells will be cased but not completed.

Propane:
"Propane prices at the Mont Belvieu distribution hub in Texas dropped to $0.9 per gallon, easing from nearly 1-1/2 year high on February 1st, as investors capitalized on profits. After the close the front month contract did get a bid just under $0.92/gallon. 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 gas."
MY TAKE: More NGL export capacity has stabilized the propane price. There is lots of demand for propane and other liquified gases in Europe.