Oil & Gas Prices - Sept 20

[dan_s]

Trading Economic:
WTI Oil
WTI crude oil futures OCT24 closed at $71.77 per barrel on Friday, a second consecutive weekly gain, driven by demand optimism and potential supply risks amid rising Middle East tensions.
> Reports indicated that US refineries are planning their lightest maintenance in three years, likely boosting oil demand in the coming months.
> This follows the Federal Reserve's larger-than-expected rate cut, which could stimulate economic activity and further improve the outlook for US fuel consumption.
> At the same time, fears of a broader Middle East conflict disrupting crude supplies are supporting oil prices, as Israel advances toward the Lebanon border, raising concerns about Iran’s involvement, a major oil producer. < It is now Real War between Israel and Hesbollah. How long will Iran stand by and allow their #1 proxy to take a beating? IMO there is a lot of geopolitical risk to supply.
> Oil also benefited from reduced Libyan production and exports, along with a larger-than-expected drawdown in US crude inventories last Wednesday.

HH Natural Gas
US natural gas futures dropped to a one-week low below $2.3/MMBtu after the Energy Information Administration (EIA) reported a larger-than-expected storage increase yesterday, but the OCT24 contract rebounded on Friday to close at $2.443.
> US utilities added 58 billion cubic feet of gas to storage for the week ending September 13, surpassing market expectations of a 53 bcf rise. Storage levels were 8.6% above the five-year average, indicating a supply surplus. < But the surplus is shrinking fast and should be gone by early December.
> Additionally, lower cooling demand is expected due to forecasts of milder weather.
> Natural gas demand typically dips during the "shoulder season" (September and October) when neither heating nor cooling is needed.
> Looking ahead, producers are expected to cut output in late 2024, following a 40% price decline over the past two months.
CME Group reported that the futures contract went higher today for
NOV24 closing at $2.734
DEC24 closing at $3.206
JAN25 closing at $3.487 <This will be the "Front Month" contract by the end of November

[dan_s]

By the end of September, the surplus of natural gas is storage to the 5-year average should be under 200 Bcf and under 125 Bcf by the end of October.