In an exclusive interview with Rigzone on Tuesday, Art Hogan, chief market strategist at B. Riley Wealth, said the entire energy complex was down on Tuesday and Monday “because Israel did not target the Iranian oil fields this week.”

“In recent days there have been fears of a disruption in the supply of hydrocarbons. That quickly disappeared when there was no more damage to oil production,” he told Rigzone yesterday.

“This appears to be one of those moments where the entire energy group is acting together,” Hogan added.

In a separate exclusive interview late Tuesday, Frederick J. Lawrence, the former chief economist of the Independent Petroleum Association of America (IPAA), told Rigzone: “This week, one of the main reasons why natural gas is in trouble has to do with geopolitical reasons and the link to oil”.

“Israeli retaliation against Iran over the weekend spared energy infrastructure and mainly targeted military targets. This led to a decline in the geopolitical premium for oil, which in turn extended to natural gas,” he added.

“Colder weather in the Rockies and northern parts of the US wasn’t enough to stem the tide for gas, even though the price rose on Tuesday. Weather analysts are monitoring an area of ​​low pressure in the Caribbean as hurricane season enters its final stretch,” Lawrence continued.

In the interview, Lawrence emphasized that in the U.S. Energy Information Administration’s (EIA) latest natural gas weekly report, “natural gas production…remained fairly robust at 101.5 billion cubic feet per day, while demand declined due to milder weather conditions in many of the the higher consuming regions of the country”.

“Comfortable fundamentals, in addition to some relief from geopolitical pressures in the Middle East, continue to keep natural gas market sentiment in check for now,” he said.

Lawrence also pointed out in the interview that the US is “seeing record production of ethane” and noted that “exports of the product have also grown due to increased activity in plays like the Permian Basin.”

“Natural gas byproducts such as ethane will remain an important supply niche to watch given its growing role as a petrochemical feedstock,” he added.

In its latest Short Term Energy Outlook (STEO), released earlier this month, the EIA forecasts that U.S. dry natural gas production will total an average of 103.5 billion cubic feet per day this year. In the previous STEO, published in September, the EIA projected that U.S. dry natural gas production would average 103.4 billion cubic feet per day by 2024.

According to data on the EIA website, which shows monthly U.S. field production of ethane from January 1981 to July 2024, and was last updated on September 30, the highest monthly figure for U.S. field production of ethane came in May of this year at 2.953 million. barrels per day. The second highest figure was seen in April, at 2.938 million barrels per day, and the third highest figure was seen in June, at 2.862 million barrels per day, the data outlined showed.

Data on the EIA website showing annual US field production of ethane from 1983 to 2023 (which was also last updated on September 30) showed that the highest annual figure for US field production of ethane came in 2023, namely 2.652 million barrels per day. The second highest figure came in 2022, at 2.406 million barrels per day, and the third highest figure came in 2021, at 2.149 million barrels per day, these data show.

In a market analysis sent to Rigzone on Wednesday, Joseph Dahrieh, Managing Principal at Tickmill, highlighted that oil prices “continue to hover near one-month lows after two days of declines, while the market sees the potential for a ceasefire estimates the fire in the Middle East. along with increased crude oil supply from OPEC+.”

“Crude oil futures are currently reflecting reports that efforts may be underway to discuss a diplomatic solution to the ongoing conflict,” Dahrieh said in the analysis.

“Suggestions that a ceasefire could be reached in the coming weeks could allay concerns about further escalation impacting the oil market,” he added.

“This potential solution could strengthen bearish sentiment in the market as traders can expect less geopolitical risks, which could lead to lower prices in the short term,” Dahrieh continued.

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