Coquest Daily Energy Report for February 28, 2024

Posted on 2024-02-28

Crude Oil futures for April settled down $.33, or -.42%, at $78.54. U.S. crude oil futures finished lower on Wednesday following the Federal Reserve's decision to maintain current interest rates, and the additional strain came from the increase in U.S. crude stockpiles. The Energy Information Administration (EIA) reported a rise of 4.2 million barrels in U.S. crude inventories last week, exceeding analysts' expectations of 2.74 million. The accumulation of stockpiles over five consecutive weeks is attributed to unplanned refinery outages post a winter storm in January, coupled with planned plant turnarounds. Although U.S. refinery utilization rates saw a marginal increase of 0.9% to reach 81.5% of total capacity last week, they remained below the 10-year seasonal average. Refineries have operated at utilization rates below 83% for the past month, marking their lengthiest period in nearly three years.


Natural Gas futures for April settled up $.077 or 4.26% at $1.885. U.S. natural gas futures are demonstrating steadiness this Wednesday recovering from a four-year low earlier in the week as European demand popped and unseasonably warm temperatures in the southern United States boosted cooling demand to make up for lackluster heating demand. While European gas demand is expected to weaken amid mild weather, global demand for liquefied natural gas (LNG) is poised for further gains throughout the year, banking on Chinese and European buyers. The Republican-controlled House recently passed a bill to overturn the LNG export pause; while unlikely to pass in the Senate, the bill earned praise from the head of Texas’ oil and gas regulatory commission.


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