Yesterday the US struck additional targets in Yemen as tensions in the Middle East continue
The CEO of Maersk said that shipping in the Red Sea is becoming increasingly dangerous as attacks on vessels continue
The US dollar is trading lower, which should support crude prices, along with equity markets trading higher
The Chinese government is looking to establish a market stabilization fund as they look to support the weakening Chinese economy
SPR refill complicated by a preference for heavy oil grades (BBG)
The Department of Energy has been slowly refilling the Strategic Petroleum Reserve over the last year, but much of the oil produced in the US is too light to be mixed with the heavy crude held in the SPR
The DOE recently canceled an order to purchase 1 MMBbl of crude from Macquarie because it contained light crude from the Eagle Ford
This is complicated by the OPEC cuts, which have reduced the supply of heavy crude in the global market
Natural gas trades at its lowest since September 2020 ahead of the storage report as the market shrugged off mid-February cold outlook
March ’24 Henry Hub is down 3.6c this morning to trade around $1.931/MMBtu
The Summer ’24 strip is down 1.9c to $2.281, and the Winter ‘24/’25 strip is down 0.9c to $3.345
Today's Euro Ens shows a colder shift east of the Rockies, with Northeast temps dropping nearly –15o F, especially in the 11-15 day period, potentially making the week ending 2/23 the second coldest of the season
Late-cycle nominations lifted Lower 48 natural gas production by +0.4 Bcf/d to reach 104.48 Bcf/d, similar to the Nov/Dec levels (Criterion)
Feed gas flows at Cameron LNG rose 28% to 2.35 bcf after a 14% drop on Tuesday, and the company declined to comment (Bloomberg)
Feedgas at Freeport LNG rose 67% to 1.47 bcf following a 39% fall with one train down for maintenance, and Cheniere's Corpus Christi gained 5.5% to 1.53 bcf but was still 28% lower than last week, with both companies declining to comment on operations
January sees uptick in Texas drilling permits and completions amid reduced DUCs (S&P, EIA)
January 2024 saw a spike in Texas drilling permits to 748, the most since March 2023, amid a record low drilled but uncompleted (DUC) wells
The state completed 879 wells in January, the highest since September, with 78% being oil wells, indicating a surge in completion activity
Despite facing higher service costs and lower prices than in 2022, Texas maintained robust oil and gas production, averaging at 5.5 MMBbl/d and 26.4 Bcf/d in 2023
DUC counts in the Eagle Ford and Permian Basin dropped significantly by the end of 2023, with a 48% and 17% decrease, respectively, allowing for continued high output even as rig numbers declined
Furthermore, Industry insiders, including Haliburton CEO Jeff Miller and North Dakota's state pipeline chief Justin Kringstad, expect increased drilling activity in 2024 due to low DUC levels
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