Your Daily Energy Report for November 6, 2024
Posted on 2024-11-06
Crude Oil
Crude Oil futures for December settled down -$.30 or -.417% at $71.69. Oil prices fell slightly on Wednesday, recovering from an early session drop of more than 3%. Investors were weighing the potential effects of Trump’s policies alongside the latest EIA data on the energy sector. Many are hopeful that a second term for Trump could fuel U.S. economic growth, boosting consumption through greater fiscal spending and tax reductions. However, there are ongoing concerns about the impact of his trade tariffs on China's economy, which could reduce demand for oil from the world's top importer. At the same time, the EIA reported a larger-than-expected build in U.S. crude stockpiles, with inventories rising by 2.149 million barrels, surpassing the anticipated 1.8 million-barrel increase. Additionally, oil producers in the Gulf of Mexico began shutting down operations and evacuating personnel as Tropical Storm Rafael, forecasted to strengthen into a Category 1 hurricane, posed a threat to further disruption.
Natural Gas
Natural Gas futures for December settled up $.077 or 2.884% at $2.747. Natural gas prices climbed on Wednesday, as oil and gas companies in the Gulf of Mexico began halting operations in preparation for Hurricane Rafael. The storm, which has strengthened to a Category 1 system with winds reaching 90 mph, is moving toward Cuba and could intensify further before it makes landfall. However, prices remain more than 10% below October's $3.1/MMBtu levels, driven by weak heating demand and high inventory levels. Meanwhile, U.S. LNG exports are declining this month, primarily due to a temporary shutdown at Freeport LNG. In contrast, production is projected to rise toward the end of 2024 and into 2025, fueled by new LNG projects like Venture Global's Plaquemines facility and Cheniere Energy's expansion in Texas.