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Your Daily Energy Report for June 18, 2024

Posted on 2024-06-18

Crude Oil

Crude Oil futures for July settled up $1.24 or 1.544% at $81.57. Oil prices climbed by over 1% on Tuesday, driven by rising tensions in Europe and the Middle East, as conflicts in these areas continue to threaten global supply. Prices increased following a significant fire caused by a Ukrainian drone strike at an oil terminal in Russia's southern port of Azov. According to both Russian officials and a Ukrainian intelligence source, the port, which includes two oil product terminals, processed around 220,000 tons of fuel for export from January to May. These ongoing attacks on Russia's oil infrastructure are jeopardizing the physical global supply and increasing the risk premium in crude futures. Additionally, the market is closely monitoring upcoming U.S. stockpile data, expected to show a 2.2 million barrel decrease in crude inventories from the previous week, as an indicator of rising oil demand during the summer driving season.
 

Natural Gas

Natural Gas futures for July settled up $.121 or 4.34% at $2.909. U.S. natural gas futures climbed on Tuesday, breaking a four-day losing streak as intense heat spreads across the nation. The anticipated early summer heat wave in the Northeast and increased demand from the power sector, which now contributes over 40% to baseload generation, indicate a potential surge in demand. Weather models predict a particularly hot period from June 19 to July 2, which is expected to support natural gas prices. At the same time, Texas may experience slight cooling mid-week due to tropical rains from a cyclone near northeastern Mexico. Traders should watch the storm's development and its effects on supply and demand dynamics.

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