Energy & Commodities

Natural Gas Hits Lowest February Price In Two Decades

Warmer winter weather this year has reduced U.S. natural gas demand for heating, and as production growth continues to exceed demand growth, U.S. natural gas prices slumped this month to their lowest February levels in two decades, the Energy Information Administration (EIA) said on Friday.

Natural gas prices at the Henry Hub benchmark closed at $1.77 per million British thermal units (MMBtu) on Monday, February 10. This was the lowest closing price for a day in February since at least 2001, according to Bloomberg and FRED data compiled by the EIA. The $1.77 per MMBtu price was also the lowest price in any month in nearly four years—since early March 2016.

Natural gas prices dipped to below US$2 per MMBtu this January for the first time in almost four years. This winter season, the glut is further aggravated by higher gas production in the Permian, higher than normal inventories, and warmer weather so far this winter.

As natural gas production outpaces demand growth, less gas has been withdrawn from underground storage this winter, the EIA said….CLICK for complete article

Bear Run Sends Oil Down For 10th Straight Session

A bear stampede has taken hold of oil markets as the coronavirus plague continues to spread FUD (fear, uncertainty and doubt) amongst the investing universe. Oil futures slid for a 10th straight session Monday as casualties hit 426 and the number of infections surpassed 20,000.

And now big money managers have joined the stampede as new data reveals the virus is creating severe demand shocks that could further depress prices. Reuters has reported that fund managers and hedge funds were heavy sellers of crude oil and various refined products last week as the worsening outbreak heightened fears of a demand meltdown in China, the world’s leading importer of crude.

Oil Teetering On The Brink Of Bear Market On Coronavirus Fears

After a brief reprieve earlier this week, oil prices tumbled again on Thursday, approaching a bear market, as fears spread that the coronavirus outbreak in China would depress oil demand, at least in the short term.

At 10:52 a.m. EDT on Thursday, WTI Crude was down 2.38 percent at $52.06 and Brent Crude was trading down 2.39 percent at $57.52, both flirting with bear market territory.

Even with Libya’s oil production plummeting by nearly 1 million barrels per day (bpd) due to the port blockade by forces loyal to General Khalifa Haftar, oil prices have seen downward pressure over the past week and a half as fears of oil demand destruction currently outweigh supply outages.

Yesterday’s EIA inventory report was also not supportive for oil prices, after the Energy Information Administration reported a build in oil inventories of 3.5 million barrels for the week to January 24. Analysts had expected a draw of 460,000 bpd, after last week the EIA reported a draw of 400,000 bpd for the seven days to January 17. CLICK for complete article

Commodity Tracker: 7 charts to watch this week

What’s happening? In 2020, each EU member country will need to meet specific national renewable energy targets set by the European Commission. One route is to blend more biofuels into road fuels, with more countries adopting E10 gasoline, which contains up to 10% ethanol, twice as much as the current E5 standard. In 2019, the Netherlands became the latest European country to introduce E10 gasoline, following Finland, Belgium, France and Germany.

What’s next? In France, E10 sales have now overtaken E5 deliveries. Growth of the E10 ethanol blend have been hindered in Germany by consumer belief that it could harm car performance. Meanwhile, the UK has yet to introduce E10 despite a very ambitious clean energy target, because most fuel stations do not have enough tanks to offer both E5 and E10 simultaneously. The US adopted tier 3 standards on 1 Jan 2020, which means less sulfur in the fuel and lower exhaust emissions of nitrogen oxides. India will move to BS VI specifications which limit the sulfur levels for road fuels to a maximum 10ppm from April 2020. China is implementing Euro 6 equivalent fuel standards and favoring higher levels of ethanol and biodiesel in the blend. The move has been phased in from 2019 and should be completed country-wide by 2022…CLICK for complete article

Trans Mountain Expansion Scores Big Win In Court

Canada’s Supreme Court has dismissed an appeal by British Columbia that aimed to stop work on the controversial Trans Mountain pipeline expansion project, Bloomberg reports, adding that the decision to dismiss the case was unanimous.

“We are all of the view to dismiss the appeal for the unanimous reasons of the Court of Appeal for British Columbia,” the Chief Justice of Canada said after the presentation of arguments.

British Columbia’s government is a staunch opponent of the Trans Mountain pipeline expansion on the grounds that it will increase the risk of spills and leaks both along its route and in the waters around the port of Burnaby where the pipeline is supposed to load oil onto tankers bound for export markets. To prevent the expansion from taking place, the government decided to claim a right to dictate how much oil and gas pass through the territory of the province… CLICK for complete article

How The Trade War Ceasefire Will Impact The Energy Industry

Although the focus of those in the oil markets has been focused on the tensions between Iran and the U.S. in recent days, with many now thinking that the worst of this impasse has now passed (it has not), primary focus is now set to return to the previous major market driver: the U.S.-China trade war. As U.S. President Donald Trump noted recently in a conversation with China’s Vice Premier, Liu He: “Every time there’s a little bad [trade war] news, the market would go down incredibly. Every time there was a little bit of good news, the market would go up incredibly. And yet, other news that was also very big, the market just didn’t really care. They just seemed to care about the deal with [the] USA and China, and that’s okay with me.” This Wednesday, the U.S. and China are set to sign a ‘Phase 1’ deal that theoretically brings to an end 18 months of trade warfare but the reality may be somewhat different. CLICK for complete article