Coquest Daily Energy Report for February 22, 2024

Posted on 2024-02-22

Crude Oil futures for April settled up $.70, or .9%, at $78.61. Crude oil futures concluded with an increase on Thursday, propelled by ongoing hostilities in the Red Sea, where Iran-aligned Houthis intensified attacks near Yemen. However, gains were tempered by a substantial increase in U.S. crude inventories. The premium for front-month WTI crude futures to the second month was up to 75 cents per barrel. That spread has widened in recent sessions, and on Tuesday touched $1.95 per barrel ahead of the March contract's expiry. Market players are likely pricing in a potential disruption to supply in the near future, with the front-month contract's premium over the second widening, which indicates a tightening market. Still, crude gains were capped on Thursday by a build in U.S. oil inventories due to refinery maintenance and outages.

Natural Gas futures for March settled down $.041 or -2.31% at $1.732. U.S. natural gas prices have been hammered for the past two weeks, and despite a minor rally, remain well below the $2.00 mark. EIA's storage draw report showed US utilities pulled 60 billion cubic feet of natural gas from storage last week, compared with market expectations of a 64 bcf draw. The report also showed gas in storage is 22.3% above the seasonal norm. Gas prices have plummeted over 30% so far in 2024 due to lower heating demand caused by a mild winter and consistent output levels, even after a brief output drop in January.


View the full report here.