Coquest Daily Energy Report for February 8, 2024

Posted on 2024-02-08

Crude Oil futures for March settled up $2.36, or 3.2%, at $76.22. Oil prices had a big jump on Thursday over concerns about an expanding conflict in the Middle East after Israel rejected a ceasefire offer proposal from Hamas. In the U.S., an unexpected reduction in gasoline and middle-distillate inventories provided support to the oil market. The decline in fuel reserves, coupled with an increase in crude stocks, resulted from ongoing maintenance activities in refineries across the country. In Russia, disruptions to refineries caused by drone attacks from Ukraine and technical glitches resulted in higher-than-anticipated crude exports in February. This situation may pose a challenge to Russia's commitment to reducing supplies as outlined in an OPEC+ agreement back in June.

Natural Gas futures for March settled down $.05 or -2.54% at $1.917. Natural gas prices in the United States experienced a significant decline to a level not seen in three years during this week. The surge in production, coupled with predominantly mild winter conditions and recent outages at liquefied natural gas (LNG) export plants, contributed to diminished demand. Analysts foresee potential cutbacks in gas drilling by certain producers due to these factors. However, any reduction is expected to be counteracted by the heightened production of associated gas from oil wells. Energy companies are allocating more resources to drill additional oil wells, considering the approximately 7% increase in crude prices recorded so far this year.


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