25
Feb
2021

Pricewatch | 25 Feb 2021 | Gas Matters Today

Only Subscribers can read the full Article

Oil prices surged to a fresh 13-month high on Wednesday as news filtered through regarding the extent of production cuts from last week’s winter storm in Texas. The front-month WTI price rallied by 2.5% to settle in the USD 63/barrel range, with the month-ahead Brent price recording a gain of 2.6% to settle in the USD 67/barrel range.

Prices were lifted after the US Energy Information Administration (EIA) said US oil production fell by more than 10%, or 1 million barrels/d, last week due to the winter storm which hit the Gulf coast. Also aiding the rally was news from the US Federal Reserve, which said interest rates will be kept low, helping weakened the dollar and supported equity markets.   

However, the EIA did report that US crude inventories increased by 1.29 million barrels last week, with stocks rising at the US’ largest storage hub, Cushing, Oklahoma, for the first time in six weeks. Reports also suggest that producers in the Permian basin – which stretches across Texas and New Mexico – have restored ~80% of oil output, with supply potentially set to outweigh demand as many US Gulf coast refineries are in need of repair following the storm last week.

Crude prices could also come under pressure in the next few weeks as reports suggest Saudi Arabia and OPEC+ will look to ease production cuts starting in April.

US benchmark Henry Hub continued to fall, with the front-month price sliding by 0.9% to close at USD 2.85/MMBtu.

In Europe, gas prices continued to rallied on Wednesday. The month-ahead UK NBP price increased by 1.3% and the front-month Dutch TTF price rallied by 0.8%, with both markers settling at the equivalent of  ~USD 5.8/MMBtu.

CME’s JKM futures contract fell for a fourth straight day, with the price settling at USD 6.04/MMBtu.

The European carbon price continued to rally, settling in the EUR 39/tonne range for the first time since 15 February.

Front-month futures and indexes at last close with day-on-day changes (click to enlarge):

Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights reserved.

Subscription Benefits

Our three titles – LNG Business Review, Gas Matters and Gas Matters Today – tackle the biggest questions on global developments and major industry trends through a mixture of news, profiles and analysis.

LNG Business Review

LNG Business Review seeks to discover new truths about today’s LNG industry. It strives to widen market players’ scope of reference by actively engaging with events, offering new perspectives while challenging existing ones, and never shying away from being a platform for debate.

Gas Matters

Gas Matters digs deep into the stories of today, keeping the challenges of tomorrow in its sights. Weekly features and interviews, informed by unrivalled in-house expertise, offer a fresh perspective on events as well as thoughtful, intelligent analysis that dares to challenge the status quo.

Gas Matters Today

Gas Matters Today cuts through the bluster of online news and views to offer trustworthy, informed perspectives on major events shaping the gas and LNG industries. This daily news service provides unparalleled insight by drawing on the collective knowledge of in-house reporters, specialist contributors and extensive archive to go beyond the headlines, making it essential reading for gas industry professionals.

Did you know that your Internet Explorer Browser is out of date?

Your MS Internet Explorer browser is out of date, and will not be fully compatible with our website. For best browsing experience we recommend that you upgrade your IE browser to a more recent version or use an alternative, more recent browser.