Daily Energy Report
Crude oil futures for June 2021 settled up $0.08 @ $61.43/bbl, trading in a $1.26 range including the overnight. RBOB settled down 0.87/cpg and heating oil settled up 0.71/cpg.
Domestic refineries have been running at reduced utilization rates since responses to the COVID-19 pandemic reduced U.S. petroleum demand in 2020. Severe winter weather in mid-February 2021 also caused petroleum product inventories to decline significantly in the Midwest and Gulf Coast as large unplanned refinery outages resulted in supply disruption. Since restarting, transportation fuel inventories have increased in the Gulf Coast region. From March 5 through April 9, combined Midwest and Gulf Coast inventories of motor gasoline increased by +4.0 million barrels or up +3.0%, distillate inventories increased by +6.0 million barrels or +8.0%, and jet fuel inventories remained unchanged.
Natural gas futures for May 2021 settled up $0.057 @ $2.749/mmbtu, trading in a .122 cent range including the overnight session.
According to EIA data, significantly colder than normal temperatures across a majority of the lower 48 states in late January through mid-February resulted in a dramatic increase of heating demand for natural gas, despite an ongoing otherwise warmer than normal winter. As a result, the winter season had larger than average withdrawals. Before the cold snap temperatures had been relatively mild, but a combination of increased heating demand, record liquefied natural gas and pipeline exports, and decreased natural gas production contributed to the withdrawal activity during February. Monthly net withdrawals of natural gas in the Lower 48 states for February totaled 778 bcf, the largest amount of natural gas withdrawn during February since 2011.
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