Oversupply conditions continue to weigh on energy prices.
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Monday 3/18
The Apr-2024 NYMEX natural gas contract gained 4.8 cents to $1.703 per MMBtu after meteorologists called for colder temperatures to return for the last week of March, which had the potential to limit storage surplus growth. Crude oil jumped $1.68 to $82.72 per barrel after Saudi Arabia and Iraq announced plans to further reduce output in the coming months. Equity markets climbed higher as investors flooded back into the tech sector ahead of a key artificial intelligence conference.
Tuesday 3/19
Natural gas closed 4.1 cents higher at $1.744 as traders continued to focus on the weather forecast to gauge late-season heating demand. Oil prices pressed 75 cents higher to $83.47 as U.S. energy officials reiterated their plan to keep replenishing Strategic Petroleum Reserve barrels over the summer months. Equities bounced higher as the Federal Reserve kicked off its two-day monetary policy meeting.
Wednesday 3/20
The cost of gas slipped 4.5 cents lower to $1.699 ahead of the next day’s storage report, which was expected to show a small build around 5 Bcf that would compare to the 5-year average 38 Bcf draw. The Apr-2024 WTI crude oil contract closed and expired $1.79 lower at $81.68 after the EIA reported a 2.0-million-barrel decline in oil inventories. Equity markets soared higher after a majority of Fed members targeted three interest rate cuts for the year
Thursday 3/21
Natural gas edged 1.6 cents lower to $1.683 after the EIA reported a 7 Bcf injection into storage, which widened the surplus compared to the 5-year average to 678 Bcf. The new prompt May-2024 WTI crude oil contract dipped 20 cents lower to $81.07 after a major financial institution warned that Germany’s economy was likely in recession during the first quarter. Stocks continued to push higher after the Labor Department reported initial jobless claims were lower on the week.
Friday 3/22
Natural gas looked to test downside technical support levels as oversupply conditions continued to weigh on trader sentiment. The front-month NYMEX natural gas contract settled 2.4 cents lower at $1.659. Crude lost 44 cents to end the week at $80.63 even on reports Russia’s crude oil refining dropped to a 10-month low after Ukraine drone attacks. Equity markets landed in the red as investors locked in profits following a strong week of gains that were inspired by supportive comments from the Fed’s Powell.
Looking Ahead
Energy prices continue to face strong headwinds as the amount of natural gas in storage is over 40% above the five-year average.
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Jonathan Lee joined ENGIE Impact in 2009 and has produced the Energy Market Watch newsletter for 15 years. He manages the Energy & Sustainability Analytics Intelligence team, focusing on market intelligence and rate forecasting. Jonathan also has a background in Finance and Marketing.
Rick Margolin manages client projects towards the development of voluntary and compliance sustainability programs, evaluation of project opportunities, adoption, implementation and compliance. He also leads tracking of regulatory, legislative and policy environments for impacts on renewables and decarbonization markets.
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