Coquest Daily Energy Report for March 25, 2024

Posted on 2024-03-25

Crude Oil futures for May settled up $1.32 or 1.64% at $81.95. Oil prices closed higher on Monday due to directives from the Russian government to reduce oil production and ongoing attacks on energy infrastructure in Russia and Ukraine, offsetting the United Nations' call for a ceasefire in Gaza. Moscow has instructed companies to cut oil output in the second quarter to meet a target of 9 million barrels per day by the end of June, aligning with commitments to OPEC. Meanwhile, the United Nations Security Council passed a resolution urging an immediate ceasefire between Israel and Hamas, with the United States abstaining from the vote. Additionally, Yemen's Houthi rebels have intensified attacks on ships in the Red Sea in solidarity with Palestinians in Gaza. A ceasefire could alleviate supply disruptions by enabling vessels to use the Suez Canal instead of longer and more costly routes around Africa's horn.


Natural Gas futures for May settled down -$.023 or -1.27% at $1.789. U.S. Gas futures declined on Monday due to decreased demand and ample domestic supply. Factors such as subdued winter consumption, near-record gas production, robust hydropower output, and ample initial stocks led to natural gas storage levels exceeding the five-year average by over 41% in late March, based on weekly EIA data. Additionally, the report indicated that US utilities replenished their inventories for the first time since November, likely marking the conclusion of the seasonal inventory depletion. Gas flows to major U.S. LNG export plants also decreased, further influencing market dynamics.


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