Daily Energy Report
Crude Oil Futures for March 2020 settled down $1.19 @ $52.14/bbl trading in a $1.54 range including the overnight-RBOB settled down 3.71/cpg and Heating Oil settled down 6.39/cpg.
According to sources within OPEC, the cartel would be inclined to extend production cuts at least through June and could discuss deeper cuts if need be as oil prices slide on fears that the Coronavirus outbreak in China will impact demand. OPEC is very likely to extend until June the current cuts, which expire in March, one source in OPEC told reporters while another added that “a further extension is a strong possibility and a deeper cut is a possibility”. Even Russia which has always been OPEC’s reluctant partner is said to want out after March is reportedly considering staying in the pact if oil prices continue to be below $60.00 a barrel.
Natural Gas Futures for March 2020 settled down $0.036 @ $1.829/mmbtu trading in a .071 cent range including the overnight session.
As the global gas glut continues to deepen, Liquefied Natural Gas prices continue to drop, currently standing at a 10 year low. LNG prices in Asia recently fell below $4.000/mmbtu, down -40.0% on a year over year basis, while prices in Northwest Europe are down by nearly -50.0%, and Europe has record high inventories for this time of year. Mild weather in Asia, Europe and the U.S. have also led to seasonally weak demand and China in particular is proving to be a disappointment to exporters. A wave of new terminals coming online over the last year has also led to a huge increase in supply-subsequently dragging down prices. Thursday morning’s weekly EIA storage data showed a decrease of -202 for the week.