Oil is higher this morning, near $73.50, and heading for a weekly gain
Following yesterday's EIA crude inventory report, US inventories are about 2% below the five-year average
Maersk warns Red Sea issues will persist, extends diversion (BBG)
Shipping company Maersk has said they will continue diverting ships away from the Red Sea “for the foreseeable future” due to attacks on vessels by the Houthis
In a statement on its website, the company said, “All available intelligence at hand confirms that the security risk continues to be at a significantly elevated level”
Ships have had to reroute around Africa, leading to higher shipping rates
Texas Railroad Commission suspends water disposal wells in two West Texas counties (BBG)
Citing an increased risk of earthquakes, the regulatory body has announced the suspension of water disposal wells in Reeves and northern Culberson counties
The ban, which will take effect January 12, applies to 23 deep disposal wells in the area
Waste water will have to be trucked or piped further away to be disposed of
This is the strongest action the RRC has taken regarding water disposal wells, having in the past only mandated reduced volumes and not an outright ban
Natural gas prices trade lower following weak inventory data despite cold weather outlook
February ’24 Henry Hub lost 12.9c this morning to trade around $2.692/MMBtu
The Winter ‘23/’24 strip is down 12.5c to $2.590, and the Summer ’24 strip is down 7.2c to $2.691
Yesterday, The EIA reported a smaller-than-expected draw of 14 Bcf for the week ending Dec 29, leading to total inventories of 3,476 Bcf, 553 Bcf above last year's level, and 399 Bcf over the five-year average
The weather model indicates warmer temperatures east of the Rockies for the next 6-10 days and cooler in the west for the 11-15 day period, with the coldest temperatures expected around Jan 17
Lower-48 gas production averaged 103.1 Bcf/d this week, a decrease of 0.45 Bcf/d from last week (Criterion)
U.S. natural gas producers navigate through production cuts and demand rebound (Reuters)
EQT's CFO, Jeremy Knop, highlighted the risk of market volatility in 2024, with natural gas prices fluctuating due to reduced drilling
He added that there is a risk of over-hedging, causing the company to miss out on higher prices that would come when demand picks up
U.S. natural gas prices ended 2023 with the biggest annual decline since 2006, driven by record production, ample inventories, and a mild winter
Furthermore, Chesapeake Energy plans to reduce production in early 2024 due to falling rig counts while aiming to increase LNG offtake agreements significantly from 6% to 20% of total production
Aethon Energy halts Haynesville development amid low natural gas prices (NGI)
Aethon Energy Management stops natural gas development in East Texas' Haynesville Shale due to low natural gas prices
Natural gas prices at East Texas' Carthage hub were over 60% lower in 2023 than in 2022
NGI’s Patrick Rau estimated Haynesville mid-cycle breakeven costs to be about $3.50/MMBtu but added that they might fall in 2024 due to lower oilfield service costs
Black Stone noted that while Aethon's suspension duration is unclear, the deal allows up to nine consecutive months or 18 months over two years of halted drilling
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