Coquest Daily Energy Report for April 02, 2024

Posted on 2024-04-02

Crude Oil futures for May settled up $1.44 or 1.72% at $85.15. Oil prices closed higher on Tuesday following a session marked by Ukrainian assaults on Russian energy infrastructure and escalating tensions in the Middle East, propelling the Brent benchmark above $89 per barrel for the first time since October. A Ukrainian drone targeted one of Russia's major refineries, with Russia initially claiming to have repelled the attack. Additionally, Russia's Astrakhan gas processing plant, operated by energy behemoth Gazprom, ceased production of petroleum products following a repair-related shutdown on March 30, as confirmed by the company. In the Middle East, Iran pledged retaliation against Israel for an airstrike that resulted in the deaths of two senior generals and five military advisors at the Iranian embassy compound in Damascus. Market attention is also focused on Wednesday's ministerial panel gathering of OPEC. Sources indicate that the panel is unlikely to propose any alterations to oil output policy.


Natural Gas futures for May settled up $.025 or 1.36% at $1.862. U.S. natural gas prices surged above $1.8 per MMBtu due to ongoing output declines and revised forecasts indicating higher demand than previously anticipated for the upcoming week. The market experienced a temporary uptick in prices following predictions of colder weather, indicating heightened demand for heating purposes. NatGasWeather forecasts a cold front sweeping across central and eastern regions of the U.S., which is expected to bolster demand later in the week. However, projections for April suggest milder temperatures, resulting in a diminished demand outlook. On the supply front, there's potential for a reduction in natural gas production, marking the first decline since the pandemic. Recent data shows a decrease in daily output, attributed to diminished drilling operations.


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