DMU: November 30, 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:
In the oil market, despite initially overlooking bearish inventory data, prices dropped after OPEC announced production cut additions and extensions, defying expectations for a bullish response. The prompt month WTI (Jan) closed at $75.96, with losses through May 2024, and Cal 24 also fell to just above $75. Product markets experienced even more significant losses, led by RBOB. The market is now evaluating the OPEC announcement, which on closer inspection (shown below) may not significantly tighten global balances as initially thought.
In natural gas, the EIA inventory report brought mixed signals, showing a higher-than-expected build but not indicative of an oversupplied market. This resulted in minor price movements, with the January contract slightly down and longer-dated tenors experiencing more significant losses. Weather forecasts showing cooler trends may influence market dynamics, but the market remains cautious, balancing weather predictions with production increases and spot pricing challenges.
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