January 4, 2024 [RBN Energy]- Crude oil prices jumped by more than 3% Wednesday after a major oilfield in Libya shut down, renewing concerns about global supplies. Brent crude added $2.36 to close at $78.25/bbl, while WTI rose by $2.32 to settle at $72.70/bbl. It was the largest increase on a percentage basis since November.
Libya’s Sharara oilfield, which produces about 300 Mb/d, was shut by local protests. A report by Reuters indicated that protesters were seeking additional development in the region, including a refinery. There was no indication as to when normal operations would resume. The market also continues to watch developments in the Israel-Hamas war, which has the potential to turn into a wider conflict. The war moved into a new area Tuesday when Israeli forces killed a Hamas commander in Beirut. EIA data will be delayed until Thursday because of this week’s holiday.
Natural gas prices continued their recent move higher, with the Henry Hub contract rising by 10 cents to close at $2.668/MMBtu. Prices have moved higher early in 2024 on the return of more typical winter temperatures for much of the country. While trading throughout December was impacted by warm short-term forecasts, storage draws in January should be closer to the 5-year average. This convergence between predictions and the 5-year average continues to lift the futures markets. RBN expects the EIA to report a withdrawal of 34 Bcf for the week ended December 29, below the five-year average of 89 Bcf and the year-ago withdrawal of 221 Bcf. EIA storage data will be released Thursday.
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