Market Insights

Market Insights

Market Insights: Navigating Recent Trends in Energy and Petrochemicals – Week of 22 February 2024


The global energy landscape continues to navigate through a complex web of geopolitical tensions, economic challenges, and supply-demand dynamics. In this article, we delve into the latest developments in the oil and gas sectors, shedding light on market trends, price movements, and the broader economic context.

Oil Prices Affected by Russia-Ukraine Conflict

The Russia-Ukraine standoff has persisted for three years, influencing oil prices and market sentiment. Despite the initial surge, oil prices have stabilized around $80 per barrel. The first quarter of 2024 witnessed a crude oil deficit due to weather-related disruptions, reflected in increased backwardation. Refinery runs are gearing up for summer amid recovering product demand, as evidenced by persistent draws in US distillate inventory.

As of February 22, NYMEX WTI crude futures settled at $78.61 per barrel, and ICE Brent concluded at $83.67 per barrel, marking a positive trend in speculative positions.

Current Geopolitical Landscape in Middle East

Geopolitical tensions persist globally, with ongoing conflicts in the Middle East and potential risks of unexpected oil price spikes. A temporary ceasefire in Gaza offers hope, but Israel’s strikes in Lebanon and Houthi militants’ attacks in the Red Sea underline the persistent turmoil. Ample spare capacity in the Middle East serves as a cushion against significant price fluctuations.

Challenges and Oil Demand in Developed Economies

Major developed economies, including the UK and Japan, face economic slowdowns and technical recessions. China took measures to stimulate the housing market and combat deflation, highlighting broader concerns about sluggish oil demand. Despite a recent uptick in January’s US CPI figures, easing global inflationary pressures may lead to interest rate cuts, potentially stimulating oil demand.

Mixed Price Dynamics in the Global Gas Markets

Europe’s TTF prices averaged $7.28 per MMBtu on February 22, driven by bearish fundamentals and high storage levels. Asian spot LNG prices fell to $8.42 per MMBtu due to high LNG inventories. In the US, Henry Hub futures prices increased to $1.732 per MMBtu, influenced by domestic natural gas production, storage levels, and warmer-than-normal weather forecasts.

End of Winter Season Leads to Adjustment in Propane Prices

Propane prices at Mont Belvieu experienced a notable decrease, closing at 86.75 cents per gallon on February 22. This 8.4% drop coincided with a slight increase in crude oil prices. The benchmark freight rate from Houston to Chiba rose, indicating improved shipping demand. The adjustment in propane prices signals the end of the winter season.

Market Dynamics Reflecting Ethane Prices

Ethane prices rose to 19.06 cents per gallon, attributed to an increase in natural gas prices. The ethane frac spread also expanded, reflecting market dynamics.

Reduced Refinery Runs in the Asian Naphtha Markets

In the Asian naphtha market, prices settled at 681.50 dollars per ton, influenced by widened crack spreads and reduced refinery runs in China.

Geopolitical Tensions to Continue Influencing Energy Prices

As the global energy market navigates through geopolitical uncertainties, economic challenges, and supply-demand dynamics, stakeholders must remain vigilant.

The recent adjustments in oil, propane, ethane, and gas prices underscore the intricate interplay of various factors shaping the industry’s landscape. The delicate balance between geopolitical tensions and market fundamentals will continue to influence energy prices in the coming months.


Adrian Calcaneo
Vice President, Energy and Feedstocks | NGL & Naphtha

Tracy Cui
Associate Director, Energy Insights

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