WTI Rises as Bakken CBR Shipments Fall
NYMEX-traded crude futures finished higher on Friday, scoring a gain of more than 5% for the month, as gains in U.S. consumer sentiment and Chicago manufacturing data buoyed prospects for energy demand. The upbeat economic data offset pressure from a report released early Friday showing that U.S. economic growth was weaker than previously estimated in the final quarter of 2013. For the month, cold weather in February continued to support demand for oil and refined products. Traders also noted that U.S. crude scored its eighth straight week of gains on market talk of fewer crude-by-rail (CBR) shipments from the booming Bakken shale in North Dakota.
West Texas Intermediate (WTI) for April delivery settled up 19¢ at US$102.59 per barrel (/bbl). In European trading, London-traded Brent crude oil settled moderately higher but ended the week lower – weighed down by an outlook for dampening demand in China and dismal economic data from Europe because of the uprisings in Ukraine. Prompt-month April Brent closed up 11¢ at $109.07/bbl, narrowing its premium to WTI to $6.48/bbl from $6.56/bbl in the previous session.
Natural Gas Futures Score 24% Weekly Slide
U.S. natural gas futures on Friday ended higher amid expectations of more severe cold. On the week, prompt-month gas logged a 24% loss – the steepest weekly drop for a front-month contract in 17 years. Ahead of the weekend, April natural gas futures advanced 2.2%, ending a four-day slide on forecasts calling for higher heating demand and freezing weather over the next several days and again in mid-March. NYMEX-traded natural gas settled up 9.8¢ at US$4.609 per million British thermal units (/mmBtu). The March contract, which had been the front month, hit a five-year high of $6.493/mmBtu on February 24 and then declined each day until it expired on February 26. It fell about 11% on Monday, 6% on Tuesday and 5% Wednesday. The weekly loss for the front-month is the biggest since December 1996 due to the sharp decline seen earlier in the week. Last week’s decline knocked the front month’s year-to-date gain to just 9% – far below the 53% seen at the high on Monday. Traders likened the dramatic price reversal to a similar occurrence in February-March 2003 – another extremely cold winter. Most weather outlooks predict bitter cold in the nation’s Northern Tier over the next five days, with the strong cold breaking down quickly over during the six- to 10-day period and warmer weather in the Rockies and throughout the Midwest over the next 11 to 15 days.
Recommended Reading
What's Affecting Oil Prices This Week? (May 6, 2024)
2024-05-06 - Stratas Advisors forecast that oil demand for 2024 will increase by 1.41 MMbbl/d in comparison to 2023 and that oil demand will increase by 810,000 bbl/d in comparison to 2Q23.
TC Energy Preparing for Natural Gas Demand Surge
2024-05-06 - TC Energy executives expect data centers in Wisconsin and Virginia to drive as much as 8 Bcf/d of natural gas demand for power generation.
It’s Complicated: E&Ps Find Some Financial Tailwinds, But It’s Not All Smooth Sailing
2024-05-03 - Relatively stable WTI prices in the $80s/bbl provide some breathing room as companies allocate cash for operations, and pragmatism is seeping into the energy transition movement.
Chesapeake Stockpiles DUCs as Doubts Creep in Over Southwestern Deal
2024-05-02 - Chesapeake Energy is stockpiling DUCs until demand returns through growth from LNG exports, power generation and industrial activity.
Majors Aim to Cycle-proof Oil by Chasing $30 Breakevens
2024-02-14 - Majors are shifting oilfields with favorable break-even points following deeper and more frequent boom cycles in the past decade and also reflects executives' belief that current high prices may not last.