Coquest Daily Energy Report for February 5, 2024

Posted on 2024-02-05

Crude Oil futures for Marchsettled up $.50, or 0.7%, at $72.78. Traders have been closely monitoring developments in the Middle East, where advancements in ceasefire discussions between Israel and Hamas are proving challenging, signaling a likelihood of prolonged tensions in the oil-producing region. In Russia, sources in Kyiv reported that two Ukrainian drones targeted the largest oil refinery in the southern part of the country on Saturday. This incident is part of an ongoing series of long-range attacks on Russian oil facilities, resulting in a reduction in Russia's exports of naphtha, a critical petrochemical feedstock. Monday's gains come after oil prices slumped 7% in the previous week on concerns about weak economic activity in China and fading hopes of imminent interest rate cuts in the United States.

Natural Gas futures for March settles up $.3 or 0.1% at $2.082. Weather experts projected temperatures across the lower 48 states will stay above average until at least Feb. 15, with a shift to near-normal temperatures expected on Feb. 16-17. The subsequent drop in temperatures during mid-February is expected to increase the demand for heating. Anticipated future reports from the EIA are expected to show lower-than-usual reductions, which could result in an uptick in surpluses. However, if the predicted colder weather in mid-to-late February materializes, it might lead to larger withdrawals, influencing natural gas prices.

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