Your Daily Energy Report for June 5, 2024

Posted on 2024-06-05

Crude Oil

Crude Oil futures for July settled up $.82 or 1.119% at $74.07. Oil prices increased on Wednesday, recovering from four-month lows. This rise was driven by anticipation of a potential interest rate cut by the Federal Reserve in September, which outweighed concerns about demand following reports of increased U.S. crude and fuel inventories. According to data from the EIA, U.S. crude stocks rose by 1.2 million barrels in the week ending May 31, contrasting with analysts' expectations of a 2.3 million barrel decline. This build was smaller than the American Petroleum Institute's reported increase of over 4 million barrels on Tuesday. Energy Secretary Jennifer Granholm indicated that the U.S. could expedite the replenishment of the Strategic Petroleum Reserve and expressed confidence in the sufficiency of the global oil supply. However, prices were pressured by Saudi Arabia's reduction of its official selling price for Arab Light crude to Asia, the first such cut in five months, highlighting the challenges OPEC producers face due to the growth of non-OPEC supply and ongoing demand concerns.

Natural Gas

Natural Gas futures for July settled up $.171 or 6.613% at $2.757. On Wednesday, U.S. natural gas futures saw a rise, attributed to a drop in daily gas production after higher prices in May prompted some producers to resume drilling activities. This increase occurred despite the significant surplus of gas in U.S. storage, with analysts estimating that gas stockpiles are about 25% above the typical level for this time of year. Recent market volatility is linked to better supply conditions, including a resolution of a pipeline outage in Louisiana and a boost in gas production across the U.S.. Weather forcasts show a rise in cooling degree days, indicating a potential increase in demand in the next 9-15days.

Continue reading the full Coquest Daily Report.