Your Daily Energy Report for May 13, 2024

Posted on 2024-05-13

Crude Oil

Crude Oil futures for June settled up $.86 or 1.099% at $78.26. Oil prices experienced an uptick on Monday, driven by positive indicators of increased demand in both the U.S. and China, the leading consumers of oil globally. This momentum followed a recent decline of $1 per barrel. Factors contributing to this incline included optimistic projections for heightened gasoline demand in the U.S., notably during Memorial Day travel, with expectations surpassing those of previous years. Concurrently, attention is focused on potential disruptions to oil supply in Western Canada due to wildfires, an issue flagged by the government as potentially severe. Additionally, ongoing anticipation persists that OPEC+ will prolong supply cuts into the latter half of the year, further buoying oil prices. Investors will watch the U.S. Consumer Price Index data due on Wednesday for clues to when the Federal Reserve will consider cutting interest rates.

Natural Gas

Natural Gas futures for June settled up $.129 or 5.728% at $2.381. On Monday, U.S. natural gas futures saw an uptick, nearing levels not seen since January, driven by a combination of factors including a reduction in output and an uptick in feedgas to LNG export terminals. Notably, there has been an increase in gas flows to major LNG export facilities, particularly from April to May, with the resurgence of operations at the Freeport plant in Texas contributing to this upward trend. Additionally, there has been an 11% decline in U.S. gas production in 2024, attributed to energy companies such as EQT and Chesapeake Energy scaling back drilling activities and postponing well completions. Meanwhile, the most recent EIA report revealed a storage build slightly below expectations, although storage levels remain roughly 34% higher than seasonal averages.

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