Oil Prices Drop on Weak Global Growth, Gas Prices Surge
Crude Oil prices continue to tumble lower, breaking below $67 today, while Gas prices remain bullish, trading above $4.
Crude Oil Faces Pressure Despite Supply Declines
Despite a reported drop in U.S. crude inventories, oil prices continue to decline as bearish factors outweigh bullish momentum. Geopolitical developments, a slowing global economy, and rising supply expectations are keeping prices under pressure.
WTI Oil Chart Daily – Oil Sellers Targeting 2024 Low
One key factor impacting prices is the anticipated restart of crude exports from Iraqi Kurdistan, which would ease supply constraints. However, the more significant move is OPEC+’s decision to increase output, which has intensified downward pressure on prices. Additionally, ongoing diplomatic efforts to resolve the Russia-Ukraine conflict could lead to higher Russian oil exports, further weighing on global oil markets.
OPEC Increasing Production
OPEC+’s plan to add 170,000 barrels per day to April supply appears to be poorly timed, as the resulting oil price decline has already outweighed the expected revenue gains from increased production. WTI crude has dropped $4 this week, breaking through late-2024 lows and approaching the September 2024 low of $65.30. If this level is breached, further downside could push prices toward 2021 pandemic-era lows, with 2023 support levels also at risk.
Natural Gas Prices Continue to Surge
Unlike oil, natural gas has remained highly bullish since dropping below $2 in August 2024. Since then, prices have steadily risen, showing strong buying interest and technical support at key levels.
While natural gas briefly declined by $1 in January, falling from $3.90 to around $3.00, buyers quickly stepped back in, driving prices back up. Gas is now trading near $4.50, reflecting strong demand and sustained bullish sentiment heading into February.
Weekly US Energy Inventory Data – Key Highlights
EIA Report (Official Government Data):
- Crude Oil Inventories: +3.614M barrels, significantly higher than the +341K expected, indicating a larger-than-anticipated supply build.
- Gasoline Inventories: -1.433M barrels, much larger draw than the expected -369K, suggesting stronger consumer demand.
- Distillate Inventories: -1.318M barrels, in contrast to the expected +220K build, pointing to higher usage and lower production levels.
- Refinery Utilization: -0.6%, falling short of the expected +0.2% increase, indicating weaker refining activity.
API (Private Sector Data Released Yesterday):
- Crude Oil Inventories: -1.455M barrels, contrasting with the EIA’s reported crude build, suggesting potential discrepancies in reporting or demand fluctuations.
- Gasoline Inventories: -1.249M barrels, in line with the EIA’s draw, reinforcing demand strength.
- Distillate Inventories: +1.136M barrels, opposite to the EIA-reported draw, raising uncertainty about distillate stock trends.
Market Outlook
Oil prices remain under heavy selling pressure, with supply-side developments and geopolitical shifts driving the current decline. If WTI falls below the $65.30 mark, further technical breakdowns could accelerate losses toward long-term support levels. Meanwhile, natural gas maintains its upward momentum, with continued buyer interest signaling further gains in the coming months.
US WTI Crude Oil Live Chart
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