GAS PRICES: ABOUT $2.732
PLATTS - The NYMEX April natural gas futures contract settled at $2.732/MMBtu Friday, shedding 2.4 cents day on day and notching its second decline in a row, snapping the upward momentum seen since it rolled to the front-month position on February 27.
The "expected winter rally" over the past few days is due to cold weather, low storage and high demand, said Phil Flynn, senior market analyst at Price Futures Group.
"The market is not overreacting" to the bullish news because of the high production levels and the expectation of increasing supply hitting the market "during the low demand periods," Flynn continued.
The front-month contract saw prices being driven up by cold weather and a bump in demand over the previous week, however, that trend appears to have subsided as a mild weather outlook, a lower-than-average storage report, falling demand and continued strong production have put downward pressure on prices.
Thursday's 57-Bcf draw from storage brings the national storage stocks to 1.625 Tcf and cuts the deficit to the five-year average to an estimated 15.6%, according to the US Energy Information Administration.
The most recent eight- to 14-day outlook from the National Weather Service calls for a likelihood of colder-than-average temperatures along the Southwest, Northwest and Rockies. In addition, the outlook calls for warmer-than-average temperatures in Texas and parts of the Midcon and Southeast, with average temperatures expected in the Northeast and Midwest. With the cold weather seen of late set to subside as the shoulder season approaches, demand is expected to fall in the coming weeks.
The current eight- to 14-day outlook for US demand is an estimated 77.9 Bcf/d average, a drop of 7.6 Bcf/d from the 85.5 Bcf/d averaged over the previous seven days, according to S&P Global Platts Analytics.
Supply across the nation is still expected to remain at the high levels seen so far in 2018, as US dry production is expected to average 77.4 Bcf/d over the next eight- to 14-day period, just below the 77.7 Bcf/d averaged so far over March 2018 and above the 71.3 Bcf/d averaged over March 2017, according to Platts Analytics.
The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EST (2400 GMT).
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REUTERS - Brent LCOc1 futures fell 43 cents, or 0.5 percent, to $79.14 a barrel by 0218 GMT, after climbing 35 cents on Tuesday. Last week, the global benchmark hit $80.50 a barrel, the highest since November 2014. U.S. West Texas Intermediate (WTI) crude CLc1 futures eased 25 cents, or 0.4 percent, to $71.95 a barrel, having climbed on Tuesday to $72.83 a barrel, the highest since November 2014.
FT - Most oil majors can now cover dividends and capital expenditure at prices around $50 per barrel, meaning that, at $80, they make a healthy surplus.
EIA - The United States remained the world's top producer of petroleum and natural gas hydrocarbons in 2017, reaching a record high. The United States has been the world's top producer of natural gas since 2009, when U.S. natural gas production surpassed that of Russia, and the world's top producer of petroleum hydrocarbons since 2013, when U.S. production exceeded Saudi Arabia’s. Since 2008, U.S. petroleum and natural gas production has increased by nearly 60%.
PLATTS - China became the largest contributor to global LNG consumption growth in 2017. It surpassed South Korea as the world's second largest LNG importer and its share of global LNG demand is expected to converge with that of Japan by 2030.