US commercial crude oil inventories decreased by 8.3 million barrels to 418.2 mmbbls in the week ended June 12, the Energy Information Administration said in its weekly report on Wednesday.
Crude inventories are now about 6% below the five-year average for this time of year, the EIA said.
Repsol and PDVSA signed a new agreement in Venezuela that could add about 20,000 barrels per day of crude output, according to multiple media reports on Tuesday.The memorandum of understanding covers the Horcon area, where Repsol, the Venezuelan government and state-owned PDVSA will assess opportunities to develop oil and gas resources.PDVSA President Hector Obregon said the companies see fresh exploration potential in an area where they already operate the Petroquiriquire joint venture. The project could lift crude output to about 60,000 b/d from the current production of roughly 40,000 b/d.After recently taking over as operator of the Petroquiriquire venture, Repsol is targeting a 50% increase in production over the next 12 months and aims to triple output within three years, according to the reports.Alongside plans to expand oil production, the companies agreed to further evaluate offshore gas opportunities. The studies will focus on gathering additional reservoir data and advancing technical assessments of Venezuela's natural gas resources, according to the reports.Repsol and PDVSA did not immediately respond to' request for comment.
US natural gas futures extended gains in after-hours trading on Tuesday as recovering feedgas flows to LNG export terminals boosted demand prospects, helping offset mixed domestic weather-driven consumption.The front-month Henry Hub contract and the continuous contract both rose 3.53% to $3.258 per million British thermal units.The market found support from stronger LNG feedgas demand and persistent uncertainty surrounding Middle East energy supplies, even as US weather demand remains uneven, analysts at Gelber & Associates said.Feedgas deliveries to US LNG export facilities have climbed back toward 19 billion cubic feet per day as seasonal maintenance activity winds down, providing a more stable source of demand after several weeks of weaker flows, Gelber said.Barchart, citing data from BNEF data, said feedgas flows rose for a seventh consecutive day on Tuesday to a seven-week high of 19.6 Bcf/d, up 11.4% from the prior week. Robust overseas LNG demand could further tighten domestic gas supplies, it said.On the supply side, US natural gas production remains near record levels. Gelber estimated output at about 109 Bcf/d, while BNEF put Tuesday production at 109.7 Bcf/d, unchanged from the previous day and up 2.7% from a year earlier.Traders are also awaiting this week's US storage report. Gelber said another inventory build is expected and could exceed the five-year average injection for the period.Demand data were mixed. BNEF estimated Lower 48 gas consumption at 68.3 Bcf/d on Tuesday, down 1.9 Bcf/d from Monday but up 1.6% from a year earlier. Celsius Energy estimated power-sector gas burn at 25.5 Bcf late Tuesday, down 3 Bcf from the previous day and 0.3 Bcf below year-ago levels.Weather forecasts remain a key variable for the market. Heat across parts of the South and West is being tempered by milder conditions across much of the eastern half of the US, Gelber said.NatGasWeather.com forecast temperatures reaching the 90s and low 100s degrees Fahrenheit across portions of the West and South, supporting regional cooling demand. The forecaster expects overall US gas demand to strengthen over the next 10 to 15 days as hotter temperatures spread across the country's interior.Looking further ahead, Gelber said a developing Super El Nino pattern bears watching because it could result in a milder winter and a less active hurricane season, potentially limiting support for longer-dated natural gas contracts.
US Farmers and Ranchers in Action released a study on Tuesday showing that, with fuel demand dropping, populations declining, and US farmers producing more, increased biofuel demand could help absorb oversupplies of corn and soybeans.The study titled "Fueling Agriculture: Biofuels as the Catalyst," authored by S&P Global, displayed the challenges that farmers face as demand for their products drops."The 1980s taught us what happens when farmers have no markets. Biofuels reversed that story - and we can't afford to go back," said Kip Tom, Former US Ambassador to the UN Agencies for Food and Agriculture.Vehicle efficiency improvements, changing driving patterns, and electrification are reducing gasoline demand.At current blend rates of 10%, US ethanol demand could fall by almost 50% to about 6.6 billion gallons by 2050, according to the study.Under the study's optimized scenario, if supply could create demand, global ethanol output could rise from the current 35 billion gallons to 140 billion gallons by 2050.That scenario would keep US corn acres at 98 million.Without new sources of demand, at current ethanol blend rates, US corn growers will cultivate roughly 31% fewer acres by 2050, equivalent to halting production on a land mass the size of North Carolina.On the oilseed side, the study showed that by 2050, there could be a 170% increase in biodiesel, renewable diesel, and sustainable aviation fuel coming into the market.The study showed that, driven by agricultural technology and innovation, global feedstock output could triple, enabling biofuel production to expand and capture a significantly larger share of the approximately 940-billion-gallon global liquid fuel market, including marine and aviation fuels.