Coquest Daily Energy Report for March 5, 2024

Posted on 2024-03-05

Crude Oil futures for April settled down $.59, or -.749%, at $78.15. Oil prices continued to drop on Tuesday as doubts about China reaching its economic growth target and a diminishing risk appetite among investors countered the impact of a weaker U.S. dollar. China, the world's largest oil importer, announced an economic growth target of approximately 5% for 2024, contributing to the downward pressure on prices. On a positive note for oil, the U.S. dollar weakened due to slower growth in the services sector. A softer dollar typically boosts oil prices by increasing demand from investors using other currencies. The latest weekly U.S. inventory reports were anticipated to reveal a rise of approximately 2.1 million barrels in crude stocks last week, marking the sixth consecutive week of increases, while distillates and gasoline stockpiles were expected to decrease.


Natural Gas futures for April settled up $.041 or 2.14% at $1.957. Natural gas futures continued their upward trend today, with traders evaluating the balance between impending production cuts and the current ample supply. Anticipations in the market are pointing towards a withdrawal in this week's EIA report, expected to be below the average, with preliminary estimates indicating a 46 billion cubic feet (Bcf) draw. In contrast, the previous week's EIA report revealed a substantial 96 Bcf draw, influenced by colder temperatures in specific regions. Despite this, the market has started the new week on a bullish note, with prices surging following the announcement from natural gas giant EQT Corp., declaring a production cut in response to the prevailing low prices.


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