Coquest Daily Energy Report for March 6, 2024

Posted on 2024-03-06

Crude Oil futures for April settled up $.98, or 1.25%, at $79.13. Oil prices increased on Wednesday, driven by a smaller-than-anticipated growth in U.S. crude inventories, substantial reductions in distillate and gasoline stocks, and statements from the U.S. Federal Reserve chief expressing expectations for interest rate cuts later this year. According to the EIA, energy companies added only 1.4 million barrels of crude to stockpiles in the week ending March 1, falling short of expectations, while distillate and gasoline supplies experienced more significant declines than predicted. Disruptions in oil tanker movements due to Red Sea attacks by the Iran-backed Houthi militia in Yemen, coupled with the recent OPEC supply cut extension, contributed to supply constraints, particularly in Asian markets. This tightness was evident as Saudi Arabia announced elevated prices for April crude sales to Asia, its primary market.


Natural Gas futures for April settled down -$.028 or -1.43% at $1.957. Ahead of the impending government storage report, near month natural gas futures saw a slight dip on Wednesday. Traders are navigating the impact of recent production reductions amid existing bearish weather patterns, maintaining a sense of cautious optimism. Despite warmer trends observed over the recent weekend and the last 24 hours, natural gas prices have displayed resilience, primarily linked to announcements of reduced U.S. production. While these production cutbacks are anticipated to provide some support to prices, their influence on near-term storage levels may be constrained. Consequently, any potential price gains could be tempered.


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