OIL PRICES: $53 - $57
North Sea Brent crude oil spot prices averaged $52 per barrel (b) in April, $1/b higher than the March average and the fifth consecutive month that Brent crude oil spot prices averaged between $50/b and $55/b. EIA forecasts Brent prices to average $53/b in 2017 and $57/b in 2018. West Texas Intermediate (WTI) crude oil prices are forecast to average $2/b less than Brent prices in both 2017 and 2018.
NYMEX contract values for August 2017 delivery traded during the five-day period ending May 4 suggest that a range of $37/b to $63/b encompasses the market expectation for WTI prices in August 2017 at the 95% confidence level.
Implied global petroleum and liquid fuels inventories are estimated to have increased by 0.4 million barrels per day (b/d) in 2016. EIA forecasts inventory builds to average 0.2 million b/d in 2017 and then increase to an average of 0.5 million b/d in 2018.
U.S. crude oil production averaged an estimated 8.9 million b/d in 2016. U.S crude oil production is forecast to average 9.3 million b/d in 2017 and almost 10.0 million b/d in 2018. EIA estimates that crude oil production for April 2017 averaged 9.1 million b/d, which is 0.2 million b/d above the April 2016 level and 0.6 million b/d above the recent monthly average low reached in September 2016.
U.S. dry natural gas production is forecast to average 74.1 billion cubic feet per day (Bcf/d) in 2017, a 1.8 Bcf/d increase from the 2016 level. This increase reverses a 2016 production decline, which was the first annual decline since 2005. Natural gas production in 2018 is forecast to be 3.2 Bcf/d more than the 2017 level.
In April, the average Henry Hub natural gas spot price was $3.10 per million British thermal units (MMBtu), 22 cents/MMBtu above the March level. New natural gas export capabilities and growing domestic natural gas consumption contribute to the forecast Henry Hub natural gas spot price rising from an average of $3.17/MMBtu in 2017 to $3.43/MMBtu in 2018. NYMEX contract values for August 2017 delivery traded during the five-day period ending May 4 suggest that a range of $2.47/MMBtu to $4.49/MMBtu encompasses the market expectation for Henry Hub natural gas prices in August 2017 at the 95% confidence level.
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U.S. EIA - Energy companies’ free cash flow—the difference between cash from operations and capital expenditure—was $119 billion for the four quarters ending June 30, 2018, the largest four-quarter sum during 2013–18 Companies reduced debt for seven consecutive quarters, contributing to the lowest long-term debt-to-equity ratio since third-quarter 2014
OPEC - Total oil demand for 2018 is now estimated at 98.82 mb/d. In 2019, world oil demand growth is forecast to rise by 1.41 mb/d. Total world oil demand in 2019 is now projected to surpass 100 mb/d for the first time and reach 100.23 mb/d.
ARAB NEWS - Oil exports from southern Iraq are heading for a record high this month, two industry sources said, adding to signs that OPEC’s second-largest producer is following through on a deal to raise supply and local unrest is not affecting shipments.
PLATTS - The International Energy Agency expects the US to account for 75% of the global growth in natural gas exports over the next five years, a bullish outlook for LNG developers facing challenges at home getting projects off the ground and abroad with tariffs affecting trade flows.