Oil prices took a hit Feb. 14, as the U.S. stockpiles expanded in the first week of February and demand fell in the same period.
U.S. crude oil stocks rose by 12.8 MMbbl from Feb. 2 to Feb. 9, the U.S. Energy Information Administration reported, while demand for finished petroleum products dropped by 973,000 bbl/d. Andrew Fletcher, senior vice president of commodity derivatives at KeyBank National Association, had expected an inventory build of 3.3 MMbbl of crude oil.
Traders reacted to the news, as WTI prices fell by more than $1.275, opening the day at $77.81 and finishing at $76.88 per barrel. Futures contracts fell by at least $0.92/bbl for each of the next four months.
Oil prices had gained 1% earlier in the day’s trading, following news reports that Israel had called in airstrikes on targets in Lebanon after a rocket attack, escalating tensions in the area and potentially raising the possibility of an enlarged military response by Israel in the Gaza Strip.
Tensions in the area could affect the world’s supply of crude oil, as Houthis continue to attack tankers and cargo ships in the Red Sea. However, U.S. crude production continues to set records. On Feb. 12, the EIA estimated that U.S. production in December hit 13.3 MMbbl/d average, a new record.
The EIA expected production would fall to a 12.6 MMbbl/d average in January, thanks to cold weather shutting down some facilities.
Recommended Reading
Triangle Energy, JV Set to Drill in North Perth Basin
2024-04-18 - The Booth-1 prospect is planned to be the first well in the joint venture’s —Triangle Energy, Strike Energy and New Zealand Oil and Gas — upcoming drilling campaign.
TotalEnergies Cements Oman Partnership with Marsa LNG Project
2024-04-22 - Marsa LNG is expected to start production by first quarter 2028 with TotalEnergies holding 80% interest in the project and Oman National Oil Co. holding 20%.
Is Double Eagle IV the Most Coveted PE-backed Permian E&P Left?
2024-04-22 - Double Eagle IV is quietly adding leases and drilling new oil wells in core parts of the Midland Basin. After a historic run of corporate consolidation, is it the most attractive private equity-backed E&P still standing in the Permian Basin?
TotalEnergies to Acquire Remaining 50% of SapuraOMV
2024-04-22 - TotalEnergies is acquiring the remaining 50% interest of upstream gas operator SapuraOMV, bringing the French company's tab to more than $1.4 billion.
EIG’s MidOcean Closes Purchase of 20% Stake in Peru LNG
2024-04-23 - MidOcean Energy’s deal for SK Earthon’s Peru LNG follows a March deal to purchase Tokyo Gas’ LNG interests in Australia.