The commodity rout continued Monday, with both US crude oil and natural gas prices under severe pressure.
WTI prices traded as low as $34.53 per barrel in early trading Monday. Iran is in the news again vowing to increase exports, which is leading to more speculation that OPEC production next year will overwhelm the global oil markets.
WTI Oil Prices Monday, December 14
Brent slipped too, falling below $37/barrel. The latest commodity price rout comes as budget season for E&P moves into the middle innings. Brent below $40 challenges economics of the majority of large scale global projects, suggesting the 2016 contraction in O&G will be more severe than previously thought.
Meanwhile US natural gas prices sank under $2 to a 14-year low as warmer temperatures swept the Lower 48 states. Natural gas prices fell as much as 6.4% today as forecasts calling for temperatures 20+ degrees Farenheit above average were released for ares of the US including the critically important east coast.
US Spot Natural Gas Prices Haven’t Been This Low Since 2001
Unrelenting gas production from US shale plays made a colder than normal winter imperative to alleviate the glut and help tighten the market so that prices could increase. Now just the opposite appears to be in the cards as this winter is shaping up to be warmer than expected.