Written Commentary
CRUDE OIL
OPEC+ Debating Planned Output Increase
April Crude Oil is lower this morning but inside yesterday’s range. China’s imports of Russian Far East crude and Iranian oil are set to rebound in March, as non-sanctioned tankers are replacing vessels sanctioned under the US embargo. LSEG data showed 11 additional non-U.S. sanctioned tankers on the Russia-China delivery route. China’s imports from Iranian reached 1.4 million bpd for February 1-20, after falling to 800,000 January. OPEC+ is debating whether to raise oil output in April as planned. They would need to finalize April production quotas by the end of next week. Eight international oil firms operating in Kurdistan said they would not resume oil exports through Turkey’s pipeline today, despite an announcement from Baghdad that the restart was imminent. President Trump meets with the Ukrainian Zelensky today to possibly sign a mineral rights deal on which a peace deal with Russia may depend.
NATURAL GAS
Supply Tightens, but Mild Weather to Continue
April Natural Gas tested this week’s lows overnight but has yet to resume its downtrend. Yesterday’s EIA storage report was less bullish than anticipated, and the milder weather in the US points to a slowdown in weekly draws in the weeks ahead. The report showed US gas storage for the week ending February 21 was 1,840 bcf, -261 bcf from 2,101 the previous week. This was a smaller draw then trade expectations of -287 to -263. Storage was down -22.5% from a year ago and -10.5% below the five-year average versus -14.9% and -5.1% the previous week. Storage is down 535 bcf from a year ago, then biggest draw relative to year-ag since October 2021. The 6-10 and 8-14 day forecast calls for normal to above normal temperatures from the great pains to the eastern seaboard. The Rockies to the west coast (and New England) show below normal temps.
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