Daily Energy Report

Crude Oil Futures for January 2020 settled up $0.14 @ $60.21/bbl trading in a $0.63 range including the overnight-RBOB settled down 0.05/cpg and Heating Oil settled up 1.81/cpg. On December 6th, OPEC and a working group of allies announced they will attempt to deepen production cuts originally put forth just one year ago. The cartel along with others is now targeting production that is 1.7 million barrels per day lower than October 2018 totals-compared with the former target reduction of 1.2 mil/bpd. OPEC announced that the cuts would be in effect through the end of March 2020. However, the Energy Information Administration assumes that OPEC will limit production through all of 2020, amid a current forecast of continuously rising oil inventories. The EIA forecasts that OPEC crude oil production will average 29.3 mil/bpd in 2020, down by 500K/bpd from 2019.

Natural Gas Futures for January 2020 settled up $0.045 @ $2.341/mmbtu trading in a .092 cent range including the overnight session. The Energy Information Administration estimates that total domestic working gas inventories were 3,616 billion cubic feet at the end of November 2019. This level was about equal to the five-year average and +19.0% higher than just a year ago. The EIA expects storage withdrawals to total 1.9 trillion cubic feet (Tcf) from the end of October to the end of March, which is significantly less than a typical five-year average winter withdrawal. Current EIA estimates would forecast the end-of-March domestic inventory tally at almost 1.9 Tcf, which would be +8.0% higher than the five-year (2015–19) average.