Oil & Gas Prices - Mar 15

[dan_s]

At the beginning of the week my hope was that WTI would test $80 again. It did and pushed over $81 on Thursday. It "feels like" WTI has broken through a hard resistance level. IEA finally admitting that the global oil market is much tighter than they've been leading people to believe.
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Trading Economics:
"WTI crude futures held above $81 per barrel on Friday and were set to advance about 4% this week, underpinned by signs of robust US demand and a bullish outlook on global consumption for this year. The latest EIA data showed that US crude inventories fell by 1.536 million barrels last week, defying expectations for a 1.338 million barrel build. The International Energy Agency also increased its 2024 global oil demand forecast to 1.3 million barrels per day from 1.2 million bpd, and revised its forecast to a slight deficit this year instead of a surplus. Oil prices received additional support this week from Ukrainian drone strikes on Russian refineries which resulted 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."

Also: War in Middle East does not appear to be ending anytime soon. Team Bidens weak responses to attacks made my Iran's proxies is encouraging more attacks. Production in Nigeria has declined by 100,000 bopd. The sanctions against Venezuela should be enforced in April.

"US natural gas futures dropped below $1.7/MMBtu on Friday, marking a more than 6% decrease for the week driven by predictions of mild weather leading to reduced gas demand for heating. Meteorologists anticipate above-average temperatures until March 18, followed by a shift to near- to below-normal levels from March 19-26. Despite a larger-than-expected withdrawal according to the latest EIA data, gas storage levels are still 37.1% higher than average for this time of year. Additionally, an extended outage at Freeport train 3 is limiting gas flow to LNG export facilities, with the timeline for resolution uncertain until mid- to late-March. Meanwhile, CNX Resources has announced plans to reduce well completions and gas production in response to low prices, contributing to a 6% drop in US gas output over the past month. Major producers like EQT and Chesapeake Energy are deliberately cutting production to manage market conditions."

MY TAKE: Near term outlook for natural gas is very bearish. However, the long-term outlook looks very good. Getting Freeport train 3 back online would be helpful and news that the big export facility in Plaquemines Parish is coming online in Q3 should help.