The Bullish Sentiment Remains

March 19, 2024

Energy futures strengthened overall amid increased political tensions and supply concerns.

Crude Oil

WTI futures returned above $80 mark


  • WTI crude futures slipped slightly, settling at $81.04 per barrel, stepping back from early November’s high levels but still marking a bi-weekly gain of over 1.3%
  • Strong US demand and a more optimistic outlook for global oil consumption from IEA and OPEC+ reports were critical drivers of the bullish movement.
  • Furthermore, recent data from the EIA revealed a surprise decline in US crude inventories, dropping by 1.54 million barrels last week instead of the expected 1.34-million-barrel increase.
  • EIA also revised its 2024 global oil demand forecast upward to 1.3 million bpd, from the previous estimate of 1.2 million bpd, and adjusted its projection for this year to a slight deficit instead of a surplus.
  • Upon that, oil prices were also supported by Ukrainian drone attacks on Russian refineries, causing a fire at Rosneft’s largest refinery.
  • Additionally, ongoing geopolitical tensions in the Middle East and the decision by OPEC+ to extend supply cuts further contributed to the strength in oil prices.
  • Anonymous sources within OPEC revealed that certain OPEC members and allies, spearheaded by Russia, have reached an agreement to prolong voluntary oil output reductions from the first quarter into the second quarter of 2024.
  • These cuts, initially totaling approximately 2.2 million barrels per day (bpd), were endorsed by OPEC+ in November, with Saudi Arabia leading by example by extending its own voluntary reduction.
  • Uncertainty surrounding ceasefire talks between Israel and Hamas, as well as ongoing Houthi attacks on Red Sea shipping also added a risk premium to oil prices.
  • Meanwhile, the most recent EIA report showed a larger-than-expected increase in US crude stocks, climbing by 4.199 million barrels last week due to a slowdown in refinery processing.
  • For the week, oil prices are up more than 5%, recovering from a 2.5% loss in the previous period.


Gasoline surges amid solid demand

  • Gasoline futures topped $2.72 per gallon, reporting a 4% bi-weekly gain.
  • The demand-to-supply ratio, as calculated with the latest EIA data, featured the strongest increase since mid-2022.
  • Last Friday’s close was the highest in eleven months due to dwindling supplies and increased demand driven by improving weather conditions.
  • The most recent EIA report revealed a substantial 5.66-million-barrel decline in gasoline inventories for the week ending March 8th, surpassing expectations of a 1.9-million-barrel drop.
  • This fall was the largest since November 3rd, 2023.

Natural Gas

LNG remains at low level

  • US natural gas futures dropped close to $1.65/MMBtu, marking a more than -9.8% decrease compared to March 1st close, driven by predictions of mild weather leading to reduced gas demand for heating.
  • Meteorologists anticipate above-average temperatures until March 18, followed by a shift to near- to below-normal levels from March 19-26.
  • Despite a larger-than-expected withdrawal according to the latest EIA data, gas storage levels are still 37.1% higher than average for this time of year.
  • Additionally, an extended outage at Freeport train 3 is limiting gas flow to LNG export facilities, with the timeline for resolution uncertain until mid- to late-March.
  • Major producers are deliberately cutting production to manage market conditions.