Coquest Daily Energy Report for March 4, 2024

Posted on 2024-03-04

Crude Oil futures for April settled down $1.23, or -1.56%, at $78.74. Oil prices dropped lower on Monday as challenges in demand offset the widely anticipated extension of voluntary output cuts through the middle of the year by the OPEC producer group. OPEC countries are prolonging their voluntary oil output cuts of 2.2 million barrels per day (bpd) into the second quarter to bolster prices amidst global growth concerns and increased output outside the group. U.S. distillate fuel oil supplies, which include heating oil, decreased in December to 3.61 million barrels per day (bpd), marking a roughly 10% drop from November and the lowest level since June 2020, according to data from the Energy Information Administration released last week. Despite this, the unexpected announcement from Russia that it would further reduce its oil output and exports by 471,000 bpd in the second quarter caught some analysts off guard.


Natural Gas futures for April settled up $.056 or 3.01% at $1.916. Natural gas futures jumped up on Monday, building on an 8% gain from the previous week. This increase comes as producers are cutting operations, and end-of-month production levels are notably lower than earlier in the month. EQT announced on Monday a reduction of nearly 1 billion cubic feet per day in production until March due to persistently low natural gas prices. Additionally, gas flow to LNG export terminals is expected to rise with the return to full power of Freeport LNG's facility. However, the latest EIA data indicates that storage levels are 26.5% higher than the average.


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