Oil is trading higher after tensions in the Red Sea continue to rise
Over the weekend, a US naval vessel destroyed several boats belonging to the Houthi rebels in the Red Sea, and an Iranian warship entered the region
Speculators have been adding to their net-long position in crude, with Brent net-longs posting the biggest two-week gain since 2017 and WTI net-longs reaching a seven-week high
China issues large crude import quotas at the start of the year (BBG)
China has front-loaded its oil import quotas for 2024, issuing allocations to refiners and traders that match nearly all of the allowances granted in 2023
The quotas amount to 3.59 MMBbl/d of crude imports
Chinese refiners have slowed their spot market purchases in recent months due to a lack of quotas, which has weakened prices of Middle Eastern crudes that are predominately shipped to Asia
India buys more Saudi crude amid payment issues with Russia (Reuters)
Imports of Saudi Arabian crude into India jumped in December, while imports from Russia fell to a five-month low
The decline in imports has been attributed to reported payment problems between India and Russia
Several ships holding Russian oil off the coast of India have been diverted East towards China
Natural gas prices trade higher this morning amid cold weather expectations
February ’24 Henry Hub gained 10.6c this morning to trade around $2.62/MMBtu
The Winter ‘23/’24 strip is up 5.9c to $2.525, and the Summer ’24 strip is up 4.3c to $2.645
The weather model indicates a warmer outlook in the 1-5 and 6-10 day period for the Midwest, South Central, and Southeast, while the Rockies & West see substantial cooling
Lower 48 gas production fell at the start of the year to 102.8 Bcf/d, down from the year-end level of 103.8 Bcf/d, across all major regions, including Appalachia, the Rockies, and the South Central (Criterion)
LNG feed gas peaked at 15.12 Bcf/d on Dec 31, helped by Corpus Christi LNG's recovery, and remained high at 14.88 Bcf/d in the last two days, with Corpus Christi LNG returning to normal on Dec 29 at 2.3-2.4 Bcf/d
Southern Natural Gas plans expansions to boost US Southeast supply (S&P)
Southern Natural Gas is expanding in the US Southeast, including the Bessemer Calera Expansion in Alabama, to meet rising energy demand, pending FERC approval
The company is undertaking several projects, such as the 6,100 Dt/d Eastern Flex Expansion and possible expansions in South Georgia, including a 2.5-mile pipeline replacement in Alabama
The company is also working with Tennessee Gas Pipeline on the 2 Bcf/d Mississippi Crossing and 1.1 Bcf/d Evangeline Pass Expansion projects, supporting Venture Global's Plaquemines LNG terminal, in response to increased demands from power stations and LNG exports
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