Oil & Gas Prices - Mar 14

[dan_s]

Notes from Trading Economics:

WTI crude futures settled at $81.26 per barrel on Thursday, the highest since November 2nd, driven by a more bullish outlook from the International Energy Agency along with signs of robust US demand and heightened geopolitical risk. The IEA increased its 2024 demand-growth estimate for crude oil to 1.3 million barrels a day from 1.2 million, and revised its forecast to a slight deficit this year instead of a surplus. According to IEA data, US crude stockpiles fell by 1.536 million barrels last week, contradicting expectations of a 1.338 million barrel increase. Also, the API data revealed a 5.5 million barrel decrease in inventories for the week, marking the first decline in seven weeks. Oil prices received additional support after Ukrainian drone strikes on Russian refineries, resulting in a fire at Rosneft's largest refinery. At the same time, geopolitical tensions in the Middle East and the decision by OPEC+ to extend supply cuts further bolstered oil prices.

US natural gas futures increased to $1.69/MMBtu, rebounding from a three-week low following the EIA's storage draw report. The government data showed that US utilities withdrew 9 billion cubic feet of natural gas from storage last week, surpassing market expectations of a 3 bcf draw. Additionally, CNX Resources also announced a reduction in well completions and gas production for the year due to lower prices. In the past month, US gas output has declined by 6%, with companies like EQT and Chesapeake Energy deliberately cutting production. Despite these factors, natural gas prices are expected to decrease for the second consecutive week due to an extended outage at Freeport train 3, which is restricting gas flow to LNG export facilities. The timeline for the Freeport LNG outage remains unclear, delaying a return to normal US LNG feedgas levels until the plant resumes full operations, anticipated in mid- to late-March.