Data from the American Petroleum Institute revealed Tuesday that US crude oil inventories decreased by 2.19 million barrels in the week ended May 8, following an 8.1-mmbbl draw the previous week and a Bloomberg-compiled survey estimate of a 1.65-mmbbl decline.
The oil market now awaits the US Energy Information Administration's petroleum inventory report, scheduled for release on Wednesday.
The US Department of Energy awarded contracts for an emergency exchange of about 53.3 million barrels of crude oil from the strategic petroleum reserve, it said in a Monday statement.The move is part of the US' broader 172-mmbbl contribution to the International Energy Agency's coordinated oil supply action.The exchange awards will not only move crude supplies quickly into the market, but also secure a 28% premium in the form of additional barrels upon return.Previous emergency exchange actions awarded about 80 mmbbls of crude oil.DOE also said that it has carried out "a historic, record-speed series of SPR exchange solicitations," which it described as the largest in the SPR's 50-year history.The latest crude exchange will draw oil from the SPR's Bayou Choctaw, Bryan Mound, Big Hill and West Hackberry storage sites.Under the exchange program, participating companies will return the borrowed crude oil with premium barrels totaling 15.1 mmbbls, helping expand SPR inventories while supplying refiners and global oil markets, DOE said.Companies may begin scheduling deliveries immediately as DOE continues evaluating additional actions to meet the full US commitment under the coordinated international release, according to the department.
Natural gas futures extended gains in after-hours trading Monday, rising more than 6% as rising cooling demand and the restart of an export terminal tightened market balances.Both the front-month Henry Hub contract and the continuous contract rose by 6.31% to $2.931 per million British thermal units.Cooling demand continued to drive consumption forecasts higher, Gelber & Associates said in a Monday note, adding that updated forecasts raised the 1-15 day temperature outlook by 11.5 degrees Fahrenheit. Aegis Hedging said most of the forecast increase was concentrated in the six- to 10-day period, when average temperatures are expected to exceed 70 degrees Fahrenheit for the first time later this week.The National Oceanic and Atmospheric Administration also forecast well-above-normal temperatures across the eastern half of the US for May 18-24.Gelber said power burn expectations for May increased by another 1 billion cubic feet per day to 33 Bcf/d from the current 32 Bcf/d, while residential and commercial demand is expected to decline to around 14.6 Bcf/d next week.On the supply side, Trading Economics said a recent decline in US output supported prices, noting that Lower 48 production has trended lower as producers, including EQT, curtailed output amid weak spot prices. Aegis Hedging estimated that 200 million to 400 million cubic feet per day of Permian gas remains shut in because of weak pricing conditions.Output, however, may be recovering. NRG Energy said production rose over the weekend to 107.5 Bcf/d, up from roughly 106 Bcf/d in recent weeks.BNEF data showed LNG net flows to US export terminals were 17.7 Bcf/d on Monday, down 0.6% from the previous week.The weekend restart of an LNG train also helped tighten supplies. Freeport LNG increased natural gas intake on Saturday and Sunday after one of its three liquefaction trains shut on Friday because of a compressor issue, Reuters reported, citing LSEG data. Gas flows to the plant fell to 1.4 Bcf/d on May 8 before recovering to about 1.9 Bcf/d between May 9 and May 11, roughly in line with the previous week's average.Vortexa said US LNG exports remained steady despite scheduled maintenance at the Cameron and Corpus Christi terminals. Total US export volumes reached 2.5 million metric tons, or 36 cargoes, in line with the four-week average.
Ovintiv Inc (OVV) reported Q1 earnings Monday, showing total production of 678,900 barrels of oil equivalent per day, up from 588,300 boe/d in the year-ago period.The company increased oil and plant condensate production to 225,300 barrels per day for the quarter ended Mar. 31, up from 205,700 b/d a year earlier.Total liquids output rose to 324,900 b/d for the quarter, compared with 294,400 b/d a year earlier.Natural gas production climbed to 2.12 billion cubic feet per day for the quarter, up from 1.76 Bcf/d in the year-ago period.Ovintiv lifted other natural gas liquids production to 99,600 b/d in Q1 from 88,700 b/d a year earlier, while plant condensate production increased to 83,500 b/d from 55,200 b/d.Permian production averaged 221,000 boe/d in the first quarter, while the asset delivered 79% liquids production and 34 net wells turned in line, the company said.Montney production averaged 365,000 boe/d in Q1, with liquids accounting for 27% of output, while 26 net wells were turned in line, according to the company.Ovintiv expects full-year 2026 production to average 620,000 boe/d to 645,000 boe/d, including oil and condensate output of 205,000 b/d to 212,000 b/d and natural gas production of 2 Bcf/d to 2.1 Bcf/d.The company plans to invest between $2.25 billion and $2.35 billion in 2026.Ovintiv completed its acquisition of NuVista Energy, adding about 100,000 boe/d of production, nearly 930 net 10,000-foot equivalent well locations and about 140,000 net acres of land.The company sold its Anadarko assets in April for about $2.85 billion in cash proceeds and used part of the proceeds to redeem $700 million of senior notes due 2028.