Week of February 1, 2016
- Crude prices rebounded last week based on comments made by the Russian energy minister that collaboration with Saudi Arabia on crude production cuts appeared possible
- Many analysts consider this highly unlikely as both countries need cash and can’t afford to lose market share to other producers
- A 4 mm bbl. drawdown in stocks of gasoline and other distillates in the US also helped boost prices, and oil traded just above $32/bbl over the weekend
- An 8 mm bbl crude stock build last week will likely limit any further upward movement
- Natural gas prices moved up to $2.22 per MMBtu NYMEX and lifted cracker feedstock prices accordingly as inventory draws exceeded expectations
- Colder weather in the US is expected to boost demand in the short term.