Daily Energy Report

Crude oil futures for May 2021 settled down $3.80 @ $57.76/bbl, trading in a $4.03 range including the overnight. RBOB settled down 6.34/cpg and heating oil settled down 8.04/cpg.

The U.S. Energy Information Administration expects OPEC crude oil production will average 25.3 million barrels per day in April 2021, which is similar to expected production for March and down -1.6 mil/bpd from EIA’s forecast for April OPEC production in last month’s Short Term Energy Report. The EIA expects OPEC crude oil production will rise to 26.6 mil/bpd in May. This increase reflects Saudi Arabia ending voluntary cuts of -1.0 mil/bpd, along with the relaxation of cuts that were extended through April at the March 4 OPEC+ meeting. This forecast assumes OPEC will produce 27.9 million b/d on average in the second half of 2021, as OPEC+ generally increases crude oil output to supply rising global oil consumption.

 

Natural gas futures for April 2021 settled down $0.074 @ $2.508/mmbtu, trading in a .079 cent range including the overnight session.

In February, the Henry Hub natural gas spot price averaged $5.350 per million British thermal units, which was up from the January average of $2.710/mmbtu. It was the highest nominal monthly average Henry Hub spot price since February 2014. Higher prices in February reflect increased demand for natural gas because of much colder-than-normal temperatures throughout most of the U.S. Price effects were amplified because the rise in demand occurred amid a drop in natural gas production due to well freeze-offs. The EIA expects Henry Hub spot prices to decline to an average of $2.880/mmbtu in the second quarter of 2021. The EIA also expects that Henry Hub spot prices will average $3.140/mmbtu in 2021, which is up from the 2020 average of $2.030/mmbtu.

 

To send a question to the author, or to learn more about this topic, click here.

For assistance with brokerage or hedging services, please click here.

Disclosure: The risk of loss in trading futures and/or options is substantial. Past performance is not indicative of future results. The information in this message derived from third-party sources is believed to be accurate and reliable; Coquest does not guarantee the accuracy or completeness of the information. Opinions expressed in this material are subject to change without notice. This report should not be interpreted as a request to engage in any transaction of futures, options, and/or OTC derivatives. The information contained in this material is not to be relied upon in substitution for the exercise of your independent judgment. Seek independent financial, tax, legal, and accounting advice from your own professional advisers, based upon your particular circumstances.

Back