Coquest Daily Energy Report for February 29, 2024

Posted on 2024-02-29

Crude Oil futures for April settled down $.28, or -.36%, at $78.26. Oil prices dipped on Thursday due to U.S. inflation data signaling potential economic softening, which could reduce crude demand. Additionally, increased OPEC production contributed to the downward pressure on prices. On the supply front, U.S. crude inventories, the highest globally, rose for the fifth consecutive week by 4.2 million barrels, surpassing the expected 2.7 million-barrel build. Despite the ongoing Middle East conflict, Brent crude has remained above $80 for three weeks, with limited impact on crude flows. The conflict between Israel and Hamas continues, with prospects for a truce appearing uncertain, and contentious issues remain unresolved according to Qatari mediators.


Natural Gas futures for April settled down $.025 or -1.33% at $1.860. US natural gas futures pared losses to trade above $1.85/MMBtu on Thursday after the EIA reported a larger-than-expected storage draw. Utilities withdrew 96 bcf of gas from storage, exceeding the market's expected 88 bcf draw. Despite the recovery, natural gas prices remain down over 11% in February, influenced by oversupply due to a mild winter and record output levels. As a result, storage levels are 26.5% higher than usual. Additionally, the continued shutdown of a liquefaction unit at Freeport LNG's export plant in Texas contributes to more gas staying within the country. Producers like Chesapeake Energy have implemented a 30% production cut to address the surplus, with other companies such as Antero Resources, Comstock Resources, and EQT also reducing drilling and production.


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