Your Daily Energy Report for May 03, 2024

Posted on 2024-05-03

Crude Oil

Crude Oil futures for June settled down -$.84 or -1.064% at $78.11. On Friday, WTI crude futures continued to drop, marking their most substantial weekly decline in three months. This movement came as investors responded to U.S. jobs data, which fell short of expectations, and a moderation in yearly wage increases. These developments fueled speculation that the Federal Reserve might enact its inaugural interest rate reduction of the year in September. There is growing concern about the prolonged presence of elevated interest rates potentially stifling economic expansion in the US. This apprehension heightened after the Fed opted to maintain rates earlier in the week, underscoring persistent high inflation figures that could postpone rate adjustments. Elevated rates traditionally exert pressure on the economy and can curb oil demand.

Natural Gas

Natural Gas futures for June settled up $.098 or 5.072% at $2.142. US natural gas futures saw a big rise of over 5% on Friday, nearing a peak not seen in three months. This surge was propelled by heightened exports and a decrease in production. Key players in the energy sector such as EQT and Chesapeake Energy have scaled back their drilling and completion activities, resulting in a notable 9% decline in US gas production this year. April witnessed a drop in gas output to 98.1 billion cubic feet per day (bcfd), marking a decrease from the all-time high of 105.5 bcfd recorded in December 2023, with further declines continuing into May. Additionally, there has been an uptick in gas flows to seven prominent liquefied natural gas (LNG) export facilities in the US, following the reactivation of Freeport LNG's plant. Looking ahead, weather forecasts indicate predominantly normal to warmer conditions until May 18th.


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