Oil is trading lower by more than $1 and heading for a weekly loss
Prices have come off after two consecutive weeks of higher prices, briefly trading near $80 this week
OPEC expected to extend cuts into next quarter (BBG)
A poll by Bloomberg of oil analysts and traders found most expect OPEC to extend their production cuts into the second quarter of the year
OPEC will decide next month whether they will extend the roughly 2 MMBbl/d production cut beyond March to avoid an oversupplied oil market
Weak economic activity from China may force OPEC to continue their output cuts, as the country has slid into deflation along with problems in its real estate sector
Houthis prepare for lengthy battle in Red Sea (BBG)
The Iranian-backed Houthi militants in Yemen are preparing for a more drawn-out conflict in the Red Sea, where they have been attacking commercial vessels
According to people with knowledge of the situation, the militant group has been shoring up its defensive and offensive capabilities recently amid ongoing airstrikes by US and UK forces in the region
The Red Sea attacks continue to disrupt trade flows and lead to higher freight rates and risk premium in global oil markets
Bearish weather continues to weigh on natural gas
The period between December ‘23 through February ’24 for the Lower 48 now ranks the warmest in terms of gas-weighted HDDs in the 2000’s
This Dec-Feb winter has also been the warmest in data going back to at least the 1950’s
A stronger and longer-lasting El Nino event contributed to this year’s warmer-than-expected winter, according to The Commodity Weather Group
Five of the six warmest winters on record have occurred in the past decade
Standard Chartered (SC) forecast oversupplied gas market
SC has forecast European gas inventories to set a new record of at least 67.5 bcm by the end of the current withdrawal season
Weak demand (weather) played a role in rising inventories
Dutch Title Transfer Facility (TTF) prices have fallen from almost $17/MMBtu to $7.30/MMBtu from Oct. 2023 to today.
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