DMU: November 16, 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 experienced a sharp decline, with WTI and product prices falling significantly following less-than-bullish inventory data. The recent optimism has faded, and the market is now scrutinizing every update from OPEC and U.S. shale producers. The possibility of OPEC intervention to prevent prolonged low prices looms over the market, which has shifted towards contango. The Dec WTI contract and Cal 24 strip closed at notably low levels, testing OPEC's market influence and North American producers' 2024 Capex plans. The market is now anticipating a rebound in physical barrel demand as refineries return from outage season, which could influence weekly inventory data and market sentiment.
In natural gas, the NYMEX market plummeted, largely influenced by the recent EIA inventory data that showed conflicting weekly changes but an overall increase in storage. The market's perception seems to be skewed towards expecting more supply, as indicated by the decline in Dec NYMEX contract and Q1 2024 strip prices. The cold weather patterns are intensifying, but the impact on storage and demand remains to be seen. The market is facing a bearish outlook, with the possibility of a slight recovery if colder forecasts materialize and offset the current supply overhang. The final weeks of December, known for their cold temperatures, could play a crucial role in the market's direction as the year ends.
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