Page 6 - Policy Economic Report - September 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

long positions were closed and short positions increased only slightly. Between 30 July and 27 August,
hedge funds and money managers sold an equivalent of 23 mb.

The premiums of light sweet crude over medium sour crude widened further in Asia and Europe, while
little changed in the USGC, where light sweet crudes continued to perform better compared to
heavy/medium sour crudes. The surge of demand for light sweet crude, particularly in the Atlantic Basin,
following supply outages in North Africa boosted the value of sweet grades. Stronger light distillate
margins, particularly with naphtha, compared to heavier productions, contributed to the widening spread
between sweet and sour crude. Meanwhile, buying interest from some Asian refiners for medium and
heavy sour softened amid a well-supplied market and fuel oil margins weakened, which added downward
pressure on the sour market.

Natural gas spot prices at the US Henry Hub benchmark averaged $1.98 per million British thermal units
(MMBtu) in August 2024. Henry Hub's natural gas prices fell again in the month of August, falling by 4.3%,
m-o-m. Reports of elevated storage levels remained a drag on prices. According to data from the US
Energy Information Administration, as of 23 August, underground storage was 2.6% higher, m-o-m, 7.3%
higher y-o-y, and 12.1% above the five-year average. Nonetheless, ongoing production cutbacks coupled
with higher LNG exports partially offset losses, as terminals returned to normalcy amid limited disruptions
from the hurricane season. Prices were down by 23.3%, y-o-y.

September 2024 Page | 5