Oil is trading lower and heading for a weekly loss of nearly $2
Prices have traded in a range between $78 and $80 this week, now closer to the bottom end of the range
Russia’s compliance with OPEC+ cuts slipped last month (BBG)
Russian crude output was about 82 MBbl/d higher than January levels, putting the country’s output at 406 MBbl/d below the February 2023 baseline after pledging to cut production by 500 MBbl/d below February 2023 levels
Despite this, Russia’s cuts last month were the second deepest since the country began reducing output in March 2023 in response to Western sanctions
While other OPEC+ countries are cutting production as well, Russia is the only one to have pledged a reduction in both crude and product output and exports
China’s oil demand growth to slow down (BBG)
The President of China National Petroleum Corp (CNPC) said that an increase in EVs as well as trucks powered by LNG will replace about 10-12% of China’s gasoline and diesel demand this year
Overall crude demand is still expected to grow as petrochemical demand is set to increase
With China being the world's largest oil importer, a slowdown in demand growth could be a bearish factor for global crude prices
Natural gas prices head for a weekly loss amid concerns of growing storage surplus
April ’24 Henry Hub is down 3.9c this morning to trade around $1.779/MMBtu
The Summer ’24 strip is up 0.4c to $2.265, and the Winter ‘24/’25 strip is up 0.2c to $3.375
Milder weather resulted in lower-than-average gas withdrawals, with the latest EIA report showing a 40 Bcf draw for the week ended March 1, meeting expectations but below the seasonal norm
Today's Euro Ens forecasts a warmer Northeast (+9.0o F) and Midwest (+5.5o F), a cooler Southeast, with range-bound temperatures across the Lower 48 over the next two weeks, peaking this week
Lower 48 gas production rose by 0.55 Bcf/d last night, exceeding 100 Bcf/d, despite a week of volatility, steadying at 100.15 Bcf/d today; March sees a 3.12 Bcf/d decline from February, notably in the Northeast, South, and Rockies (Criterion)
Permian gas prices fell into negative territory ahead of pipeline maintenance (S&P)
Spot Waha prices fell to their lowest since October on March 5, hitting -31c before recovering to around 20c on Friday due to a capacity reduction on the Permian Highway Pipeline
The maintenance scheduled for March 6 on Kinder Morgan's 2.65 Bcf/d Permian Highway Pipeline was set to reduce capacity by 16% to nearly 2.23 Bcf/d due to repairs at the Praha compressor station, with full service resuming on March 7
Price volatility in the Permian Basin is likely to persist, especially through the spring shoulder season, exacerbated by post-January production rebound from 13.1 Bcf/d to mid-18 Bcf/d levels and ongoing Henry hub weakness
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