Daily Energy Report

Crude Oil Futures for March 2020 settled down $1.64 @ $56.74/bbl trading in a $1.84 range including the overnight-RBOB settled down 5.69/cpg and Heating Oil settled down 2.90/cpg. In the Energy Information Administration’s Short-Term Energy Outlook for January 2020 the EIA forecasts that Brent crude oil spot price will average $65.00/bbl. during 2020 and $68.00/bbl. for 2021 and that the West Texas Intermediate spot price will average $59.00/bbl. in 2020 and $62.00/bbl. for 2021.The EIA expects that crude oil prices will remain somewhat elevated during the first few months of calendar 2020-reflecting a price premium on crude oil from recent geopolitical events, however, this price premium will diminish over the first half of 2020 and market fundamentals will drive the crude oil price forecast in the second half of 2020 and into 2021.

Natural Gas Futures for February 2020 settled up $0.010 @ $1.905/mmbtu trading in a .047 cent range including the overnight session. According to the Energy Information Administration’s statistics, domestic dry natural gas production set a new record in 2019, averaging 92.0 billion cubic feet per day. The EIA forecasts dry natural gas production will rise to 94.7 bcf/d in 2020 and then decline to 94.1 bcf/d for calendar 2021. Production in the Appalachian region drives the forecast as it shifts from growth position in 2020 to declining production in 2021. The EIA forecasts that Henry Hub natural gas spot prices will average $2.330/mmbtu for 2020, down from $2.570/mmbtu in 2019. The EIA currently expects that natural gas prices will then increase during 2021, reaching an annual average of $2.540/mmbtu.