Your Daily Energy Report for May 15, 2024

Posted on 2024-05-15

Crude Oil

Crude Oil futures for June settled up $.61 or .782% at $78.63. Oil prices experienced a notable increase on Wednesday, bouncing back from a recent two-month low observed in the preceding session. This uptick came as the market weighed optimistic U.S. economic indicators and positive crude storage data against a less favorable projection from the International Energy Agency regarding global oil demand growth. Earlier in the day, the pessimistic report from the IEA drove both benchmarks into technically oversold territory, marking prices at their lowest since February. Tuesday saw both benchmarks closing at their lowest since March 12. However, the trajectory changed following the release of U.S. data indicating a larger-than-anticipated crude drawdown and moderate inflation, leading to speculation about a potential interest rate cut later in the year. On another front, the IEA adjusted its forecast for 2024 oil demand growth, further differentiating from OPEC's expectations for the current year's global demand outlook.

Natural Gas

Natural Gas futures for June settled up $.072 or 3.072% at $2.416. U.S. natural gas futures reached their highest point since mid-January on Wednesday. This uptick was primarily fueled by predictions of warmer weather, which hinted at heightened demand for summer cooling, alongside a decline in production. Notably, U.S. gas production has dropped approximately 10% in 2024 thus far, attributed to delayed well completions and reduced drilling activities by several energy firms, such as EQT and Chesapeake Energy. Looking forward, weather forecasts suggest a transition towards warmer-than-average temperatures spanning from May 18-30, driving up gas usage by power generators to satisfy the increased need for air conditioning. Meanwhile, natural gas flows to major U.S. LNG export facilities increased in May compared to April.

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