The US continues to strike targets in Yemen as tensions in the Red Sea continue to rise
The EIA will release its weekly crude inventory report today, with the API forecasting a build in US inventories of 0.5 MMBbls, and a Cushing build of 2 MMBbls
IEA raises 2024 oil demand forecast (Reuters)
The International Energy Agency has increased its forecast for oil demand growth in 2024, although its expectations are still lower than OPEC’s
The latest forecast is 180 MBbl/d higher at 1.24 MMBbl/d of demand growth
The group forecasts supply to grow by 1.5 MMBbl/d, driven by the US, Brazil, and Guyana
The IEA said in their report, "Barring significant disruptions to oil flows, the market looks reasonably well supplied in 2024, with higher-than-expected non-OPEC+ production increases set to outpace oil demand growth by a healthy margin"
Gulf Coast crude prices strengthen as takeaway capacity tightens (Reuters)
WTI at the Magellan East Houston terminal has traded at a 45c premium to WTI Midland this month, compared to a 2023 average of a 21c premium
Wood Mackenzie expects the MEH-Midland spread to trade higher in 2024, averaging a premium of 75c
Pipelines from the Permian Basin to the US Gulf Coast were 80% full in December, according to data from Wood Mackenzie
Flows from the Permian to Houston rose to 73% of capacity in December compared to 52% in July, as high utilization on pipes to Corpus Christi pushed more crude to Houston
Wood Mackenzie said, "We expect incremental barrels out of the Permian largely moving to Houston as limited room for growth remains on Corpus Christi-bound lines,"
Natural gas prices extend losses ahead of the storage report and looming warm weather
February ’24 Henry Hub is down 4.9c this morning to trade around $2.821/MMBtu
The Winter ‘23/’24 strip is down 4.8c to $2.602, and the Summer ’24 strip is down 4.1c to $2.659
Today, the Euro Ens transitioned to overall cooling, except for the Southeast's 12o F rise, with reduced warming intensity next week and a significant cold shot forecast on Saturday
Lower 48 natural gas production recovered post-freeze, increasing by +1.7 Bcf/d, mainly in the South Central, but limited by Rockies and Appalachia, reaching 95 Bcf/d compared to the pre-storm rate of 102-103 Bcf/d (Criterion)
Freeport LNG's Unit in Texas sees a brief outage (Bloomberg, Criterion)
Freeport LNG’s train 2 was briefly brought offline, according to a filing Wednesday by the Texas Commission on Environmental Quality
The outage, lasting from January 16 to 17, was due to an issue with the 12V-33 level controller, affecting train 2 for nearly 16 hours
Additionally, train 3 was down for 12 hours on January 17, caused by a 13K-30 propane compressor problem
These issues resulted in a drop in Freeport LNG nominations to 0.85 Bcf/d, later increasing to 1.62 Bcf/d, with the reason for the January 15 decline to 0.79 Bcf/d still unclear
NYK halts ship passage through Red Sea amid rising freight costs (S&P)
Japan's NYK, one of the world's largest shipping operators, has stopped its fleet from transiting the Red Sea due to security concerns in the wake of recent air strikes
The company’s fleet comprises 818 vessels, including 69 tankers and 86 LNG vessels
LR2 tankers, capable of carrying 90,000 mt of refined oil products, now see a $900,000 premium for voyages via Cape on the Persian Gulf-Europe routes, compared to the usual Suez Canal route, said brokers in Tokyo and Singapore
They added that this change in route results in a 20% increase in costs for charterers based solely on the choice of route
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