Oil & Gas Prices - March 20
Posted: Thu Mar 20, 2025 3:20 pm
Oil prices have been fluctuating with modest gains and losses over the past two weeks, with WTI crude futures pushing up over $68 per barrel this afternoon.
> On one hand, geopolitical factors have been exerting upward pressure on prices. Tensions in the Middle East escalated as Israel launched a new ground operation in Gaza, breaking a two-month ceasefire, while the US continued airstrikes against Iran-supported Houthi rebels in Yemen. Also, a ceasefire between Ukraine and Russia remains distant, despite a temporary halt in strikes on energy facilities and a pledge by Trump and Zelensky to work towards ending the war.
> On the other hand, the supply side appears to be balanced. Although gasoline inventories fell for the 3rd week and by more than expected, crude oil stocks rose more than anticipated for the 2nd week in a row.
> Finally, traders expect additional supply to enter the market after OPEC+ announced plans to increase production by 138K bpd in April, marking its first output increase since 2022.
> FEAR of "Drill Baby Drill" seems to be fading a bit as none of the upstream companies that I follow are likely to add drilling rigs to this year capital program with oil prices under $70/bbl. Even EIA has lowered their U.S. oil production forecasts for 2025 and 2026.
US natural gas futures dropped to $4.00/MMBtu after the EIA reported a 9 Bcf inventory build during the week ending March 14. 9 Bcf is a "tiny' build in the U.S. natural gas market that has over 38.5 Trillion cubic feet of annual demand, including rising exports.
> US utilities added 9 billion cubic feet of gas to storage for the week ending March 14, surpassing forecasts of 3 billion cubic feet. This marks the first stock increase since November 2024, narrowing the storage deficit.
> Currently, natural gas inventories are 26.8% lower than a year ago and 10% below the five-year average.
> Meanwhile, LNG exports hit a record 15.7 bcfd in March, driven by expanded operations at Venture Global’s Plaquemines LNG facility.
> Looking ahead, temperatures are expected to stay near seasonal averages through early April.
> On the supply side, natural gas production in the Lower 48 states rose to 105.7 bcfd in March, exceeding February’s record of 105.1 bcfd.
> On one hand, geopolitical factors have been exerting upward pressure on prices. Tensions in the Middle East escalated as Israel launched a new ground operation in Gaza, breaking a two-month ceasefire, while the US continued airstrikes against Iran-supported Houthi rebels in Yemen. Also, a ceasefire between Ukraine and Russia remains distant, despite a temporary halt in strikes on energy facilities and a pledge by Trump and Zelensky to work towards ending the war.
> On the other hand, the supply side appears to be balanced. Although gasoline inventories fell for the 3rd week and by more than expected, crude oil stocks rose more than anticipated for the 2nd week in a row.
> Finally, traders expect additional supply to enter the market after OPEC+ announced plans to increase production by 138K bpd in April, marking its first output increase since 2022.
> FEAR of "Drill Baby Drill" seems to be fading a bit as none of the upstream companies that I follow are likely to add drilling rigs to this year capital program with oil prices under $70/bbl. Even EIA has lowered their U.S. oil production forecasts for 2025 and 2026.
US natural gas futures dropped to $4.00/MMBtu after the EIA reported a 9 Bcf inventory build during the week ending March 14. 9 Bcf is a "tiny' build in the U.S. natural gas market that has over 38.5 Trillion cubic feet of annual demand, including rising exports.
> US utilities added 9 billion cubic feet of gas to storage for the week ending March 14, surpassing forecasts of 3 billion cubic feet. This marks the first stock increase since November 2024, narrowing the storage deficit.
> Currently, natural gas inventories are 26.8% lower than a year ago and 10% below the five-year average.
> Meanwhile, LNG exports hit a record 15.7 bcfd in March, driven by expanded operations at Venture Global’s Plaquemines LNG facility.
> Looking ahead, temperatures are expected to stay near seasonal averages through early April.
> On the supply side, natural gas production in the Lower 48 states rose to 105.7 bcfd in March, exceeding February’s record of 105.1 bcfd.