The United Nations Climate Change Conference (COP26) drew to a close last week in Glasgow as winter weather arrived bringing first snow-making event of the season across parts of the midwestern U.S.
During the conference, President Biden had urged OPEC+ members to increase oil production to help combat inflation seen in the energy space and serve as a catalyst for post-pandemic recovery. Those pleas were generally ignored and discounted by OPEC+ members, who have decided to leave extraction rates unchanged in November at 400,000 bpd in a bid to keep prices well supported. Some have speculated that the U.S. may resort to selling stocks of oil from the strategic petroleum reserve in response to rising prices consumers are facing at the pump and to heat their homes. Higher heating costs are only one of several inflationary concerns consumers are facing heading into the holiday season with first blizzard of season descending out of Canada blanketing parts of the upper Midwest from Dakotas through Minneapolis with several inches of snow.
The EIA natural gas weekly report indicated that for the week of Nov. 5, stocks of natural gas around the country were virtually unchanged from the previous week and suggest that the normal seasonal build may have peaked.
With most stocks lower than we’ve seen in recent years, it will make energy markets susceptible to weather market volatility and spikes in prices this winter.