DMU: November 15, 2023
Analysis of the latest trends in oil and natural gas markets, including OPEC+ decisions, macroeconomic factors, geopolitical influences, and EIA inventory data.
On Today’s Daily Market Update:
The crude market reacted negatively to the DOE's double dose of data, with Dec WTI dropping significantly and the curve shifting into contango. This response suggests uncertainty regarding the need for incremental crude barrels and OPEC+ decision-making. The DOE report revealed a substantial crude stock increase and significant product draws, particularly in diesel and gasoline, contrasting with last year's trends.
In natural gas, prices rebounded after a recent drop, influenced by colder weather forecasts. The Dec contract regained its previous losses, and longer-dated tenors showed modest gains. The market is now focused on the upcoming EIA inventory report, which will cover two weeks of data. Forecast adjustments to colder temperatures are influencing market sentiment, but the overall impact will depend on the inventory changes reported. A significant shift in inventory could sway the market, with a cumulative change of less than +30 Bcf favoring bulls and +50 Bcf or more favoring bears. The South Central inventory change will also be a key factor in assessing market tightness as the winter progresses.
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