Coquest Daily Energy Report

Crude Oil Futures for April 2023 settled up $0.90 @ $67.64/bbl. trading in a $3.58 range including the overnight-RBOB settled up 3.45/cpg and Heating Oil settled up 0.84/cpg. Russia expects its oil and gas production to fall this year compared to 2022, partly due to the production cuts announced for March, Russian Energy Minister Nikolai Shulginov told lawmakers last Wednesday. “For 2023, we expect oil production levels to be slightly lower, also because of the voluntary reduction in output”. “Gas production volumes will continue to decline both due to the abandonment of the European market and the timing of the re-routing of energy flows to the East,” the energy minister added. The IEA said, “It remains to be seen if there will be sufficient appetite for Russian oil products now that the price cap is in place or if its production will start to fall under the weight of sanctions.” “Revenues are already dwindling,” the agency noted.

Natural Gas Futures for April 2023 settled down $0.115 @ $2.223/mmbtu trading in a 0.216 cent range including the overnight session. According to Energy Information Administration data, as a result of the mild winter and low natural gas consumption in the residential and commercial sectors, natural gas consumption is forecast to be -2.4% or -2.0 bcf/d less during calendar 2023 than 2022.Reduced natural gas consumption in January and February slowed withdrawals from inventories to significantly less than the five-year average and reduced natural gas prices. The spot price of natural gas at the U.S. benchmark Henry Hub averaged $2.380/mmbtu. in February, the lowest monthly average since September 2020. Although the data reduced the Henry Hub price forecast from last month’s STEO, it is still expected that natural gas prices will increase in the coming months. Price increases in the forecast result mostly from rising demand from Freeport LNG reopening.


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