Coquest Daily Energy Report
Crude Oil Futures for February 2023 settled down $0.80 @ $77.49/bbl. trading in a $2.87 range including the overnight-RBOB settled down 0.70/cpg and Heating Oil settled down 0.81/cpg. The American Petroleum Institute’s weekly Crude Oil storage report released late Tuesday afternoon showed that domestic crude supplies decreased by -3.1 million barrels for the week ended December 16th, 2022. The weekly API data also showed a storage increase of +4.5 mil/bbl. for Gasoline and a build of +830 k/bbl. for Distillates. The Energy Information Administration’s weekly petroleum storage report released early Wednesday morning showed that domestic crude supplies decreased by -5.9 million barrels for the week ended December 16th, 2022. The weekly EIA data also showed an increase of +2.5 mil/bbl. for Gasoline and a draw of -200 k/bbl. for Distillates. Total commercial petroleum inventories decreased last week by +11.9 million barrels.
Natural Gas Futures for January 2023 settled down $0.333 @ $4.999/mmbtu trading in a 0.678 cent range including the overnight session. While Europe managed to fill its gas storage ahead of winter this year and temperatures are generally mild, it will still have to import large amounts of LNG in a competitive market to survive next winter. The next 12 to 24 months will be critical in establishing whether Europe can fend off a longer term energy crisis. According to the International Energy Agency, if Russian gas supply’s drop to zero and Chinese LNG demand nears 2021 levels, the EU could have a supply demand gap of 27 billion cubic meters in 2023. European households and businesses have already seen a rise in total energy costs in excess of 1T Euros according to estimates. If governments in Europe do nothing except offer financial support, and if they cover the price increases, the sum would represent 6.0% of the annual GDP of the EU.
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