Oil is trading higher, just under $80, and headed for a weekly gain
The WTI prompt month spread has continued to push higher, with it trading at the highest level since October, potentially signaling a tighter market
New Middle East refineries reducing supply available for export (BBG)
The startup of two refineries in the Middle East is reducing the volume of crude that can be exported by Oman and Kuwait
Shipments of crude from Oman to the Duqm refinery jumped last month, while deliveries from Kuwait doubled
Kuwait’s 600 MBbl/d Al Zour refinery has also been ramping up, leading to a fall in exports from Kuwait
Chinese oil majors trade record amount of key derivative contract (BBG)
Trade in Dubai partials contracts, which help set the price of the Middle Eastern benchmark, reached record levels following trades by PetroChina and Sinopec
292 contracts traded, and Dubai oil open interest reached a record high of 550k contracts on ICE
Natural gas prices trade lower amid a weak weather outlook
April ’24 Henry Hub is down 1.9c this morning to trade around $1.841/MMBtu
The Summer ’24 strip is down 2.4c to $2.320, and the Winter ‘24/’25 strip is down 1.9c to $3.408
Today's Euro Ens indicates mixed temperatures, with colder conditions in the Northeast and West, but anticipates warming through the weekend and a mild cool down next week
Yesterday’s production model revision raised output by 0.67 Bcf/d to 101.5 Bcf/d, but early-cycle cuts later reduced it across the Northeast, South Central, and Rockies, by 1.17 Bcf/d starting March at 100.36 Bcf/d (Criterion)
Matterhorn to ease Waha Hub strain in Q3 2024, new pipeline needed by 2026 (S&P)
The Matterhorn Express pipeline, starting in Q3 2024 with a capacity of 2.5 Bcf/d, aims to ease congestion at the Waha Hub
However, there's a growing consensus among midstream operators on the need for another greenfield pipeline by 2026 as Permian production grows
Record gas production in the Permian Basin, averaging 18.2 Bcf/d in February 2024, highlights the necessity for another pipeline by 2026 to handle a 33% production increase expected by December 2028
Looking ahead, several midstream companies, including Targa Resources, Energy Transfer, Kinder Morgan, and MPLX, are exploring or planning new pipeline projects. These ventures, like the Apex and Warrior pipelines, aim for completion around late 2026 to early 2027
Natural gas market poised for potential rally amid oversold conditions and volatile trading (NGI)
Bearish fundamentals and oversold conditions hint at a market rebound despite a bearish outlook and volatile trading patterns, according to technical analysts
Speculator short interest is near a four-year high, according to the latest CFTC data, with market participants adding 43,061 new shorts and 12,497 new longs
Furthermore, Thomas Saal of StoneX Financial said that the market is undervalued compared to its 52-week moving average of $2.50 despite speculators selling over 100,000 contracts'
Analysts suggest the market could see a rally driven by short covering if bullish fundamentals emerge, though any rally is likely to be temporary against a backdrop of bearish fundamentals and speculative activity
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