Oil prices are higher today, around $77.50, extending gains from yesterday
The US Consumer Price Index came in higher than expected, potentially weakening the Federal Reserve’s case for lowering interest rates
IEA says oil supply will match demand this year (BBG)
Global oil consumption is expected to increase by 1.2 to 1.3 MMBbl/d, a much weaker pace of growth than in 2023
The Executive Director of the IEA said in an interview, “So in the absence of major geopolitical turmoil or extreme weather events, we would expect a rather comfortable oil market and moderate oil price evolution throughout 2024”
The IEA will release its next monthly evaluation of the oil market on February 15
OPEC report shows production cuts only partially instituted (BBG)
While Kuwait and Algeria have reduced production, Iraq is still producing more oil than they agreed to
Uneven compliance creates a challenge for OPEC, as it seeks to keep oil prices stabilized
Output from OPEC’s 12 members fell by 350 MBbl/d in January, but almost half of the reduction came from a pipeline disruption in Libya
Natural gas prices continued to slide lower Tuesday morning as the weather forecast showed a loss of 7 HDDs in the past 24 hours (CWG)
The March contract was trading near $1.68/MMBtu around 8:25 AM CST
Gas is now at the lowest prompt price in at least the past 25 years for the same week
Looking at the rolling Summer strip from a seasonal perspective – It is the second-lowest strip since at least 2010, behind only 2020’s COVID
February weather is adding insult to injury for producers
This February ranks second-warmest in the 2000’s in terms of Heating Degree Days (HDDs) at 639 (CWG)
The estimate includes realized weather up to Feb. 12 and forecast for the remainder of the month
When extending data to the 1950’s, Feb. 2024 could land as the third-hottest for the Lower 48
AEGIS notes that, yes, weather has been quite bearish, but the market is also dealing with a robust supply near 104 Bcf/d (up 3 Bcf/d y-o-y)
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