Oil & Gas Prices - Feb 3

[dan_s]

Trading Economics
Oil:
WTI crude oil futures rose to above $74 per barrel on Monday morning after U.S. President Donald Trump imposed tariffs on Canada, Mexico, and China, raising concerns about potential supply disruptions.
> The U.S. announced tariffs of 25% on goods from Canada and Mexico, and 10% on those from China, set to take effect on Tuesday. Canadian oil also faces a 10% tariff, while Mexican energy imports will be charged the full 25%, threatening higher costs for consumers.
> In response, Canada and Mexico said they were preparing similar tariffs on U.S. goods, while China said it would file a lawsuit at the World Trade Organization.
> However, crude prices may face downward pressure in the near term as the implementation of tariffs and the subsequent retaliation could trigger a broader trade war, weighing on global economic growth and dampening energy demand.
> Meanwhile, factory activity in China, the largest oil importer, grew at a slower pace in January.

Natural Gas:
US natural gas futures surged 8% to $3.287/MMBtu on Monday, recovering from an 11.8% drop the previous week, following President Trump’s announcement on Saturday to impose tariffs on Canadian and Mexican oil, which raised concerns about supply disruptions.
> The US imports around 4 million barrels of Canadian oil daily, much of which is processed in the Midwest, and more than 450,000 barrels of Mexican oil, mainly for Gulf Coast refiners.
> The tariffs are set at 25% for Mexican oil and 10% for Canadian energy products. Goldman Sachs estimates that Canadian natural gas exports to the US could drop by a sound 0.16 billion cubic feet per day (bcfd) due to these tariffs.
> Additionally, the Energy Information Administration reported a massive gas withdrawal of 321 billion cubic feet (bcf) due to extreme cold, exceeding both last year’s and the five-year average. < CelsiusEnergy's forecast is that 172 Bcf was draw from storage for the week of January 31, which will put gas in storage 112 Bcf below the 5-year average at the end of January. Weather forecasts have turned colder for the eastern U.S. in 2nd half of February. My WAG is that U.S. gas in storage will be more than 200 Bcf below the 5-year average at the end of March.