RBC said in a note that they expect OPEC+ to extend their production cuts through at least June
Goldman Sachs and Bank of America both expect crude prices to remain rangebound in the near term, with Goldman seeing a $20 range around $80/Bbl and BofA expecting prices to stay between $60/Bbl and $80/Bbl
Chinese buying raises oil demand hopes (BBG)
After a boom in travel over the Lunar New Year, the outlook for Chinese markets has brightened, raising hopes of a more sustained demand recovery
Energy Aspects said, “Some refineries may be raising run rates or postponing maintenance plans because of strong demand momentum following higher-than-expected Lunar New Year travel
According to Mysteel OilChem, refining capacity in China is expected to rise 18% to a three-year high by the fourth quarter of 2024
US sour crude prices rise as DOE refills SPR (BBG)
Medium sour crude grades such as Poseidon and Southern Green Canyon climbed following an announcement by the DOE to buy more sour crude for the SPR
Physical prices for Poseidon are trading at the highest level in more than a month at a premium of 8c to NYMEX WTI, while SGC is trading at the narrowest discount in more than a week at -45c to WTI
The DOE is seeking 3 MMBbls for delivery in August
Natural gas prices trade modestly higher amid low production
March ’24 Henry Hub is up 2.1c this morning to trade around $1.68/MMBtu
The Summer ’24 strip is up 6.8c to $2.308, and the Winter ‘24/’25 strip is up 5.6c to $3.406
Today's Euro Ens indicates a slightly cooler shift east of the Rockies for the 11-15 day period, moderating the previous warmer outlook
Lower 48 natural gas production remains low, with a slight dip to 101.44 Bcf/d driven by weak South Central output and a notable drop in Appalachia, especially from Equitrans (-0.57 Bcf/d) (Criterion)
Coterra halves Marcellus spending, eyes comeback in natural gas prices (NGI)
Coterra Energy is scaling back its Marcellus Shale operations, planning a 55% cut in spending there, leading to a total capex reduction of 12% to $1.75-1.95 billion for 2024
Despite the current slowdown, CEO Tom Jorden expresses optimism on the 12- to 18-month outlook, especially with upcoming LNG facility expansions
The company will halve its Marcellus drilling and completion efforts, aiming for 37-43 wells in 2024, down from 71 in 2023
Coterra forecasts a modest 2% drop in overall 2024 production to 0.64-0.68 MBoe/d, with a 6% decrease in natural gas output to 2.65-2.85 Bcf/d offset by a 6% rise in oil production to 99-105 MBbl/d
Hedge funds grow increasingly pessimistic on U.S. gas markets (PGJ, Reuters)
Hedge funds and other money managers adopt a highly bearish outlook on U.S. gas, with a massive sell-off of 399 Bcf in futures and options linked to Henry Hub for the week ending on Feb. 20.
Persistent selling by fund managers over five weeks has led to a net short position of 1,675 Bcf, a drastic turn from a net long position of 410 Bcf in mid-January
Prices are pressured by gas inventories swelling to 436 Bcf above the ten-year average due to a mild winter influenced by El Niño and continuous growth in domestic gas production
Analysts now expect a delayed market rebalancing, possibly not until the winter 2024/25, as the surplus and low prices persist, exacerbated by increased drilling for oil and associated gas production
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