Coquest

Your Daily Energy Report for December 3, 2024

Posted on 2024-12-03

Crude Oil

Crude Oil futures for January settled up $1.84 or 2.702% at $69.94. Oil prices climbed on Tuesday, supported by new US sanctions targeting Iranian oil and indications that OPEC+ may prolong its production cuts. Reports suggest the group is on the verge of postponing a planned output increase for three months, with a final decision expected by Thursday, easing concerns about a potential supply glut. Additionally, the US imposed sanctions on 35 entities and vessels linked to illegal Iranian oil exports. Meanwhile, China is setting new economic goals for 2025, and Brazil's oil output, an important non-OPEC source, dropped 6% from the previous month and 8% year-over-year. In Lebanon, Israeli forces have continued attacks on suspected Hezbollah fighters despite a ceasefire agreement last week, prompting top Lebanese officials to urge the US and France to press Israel to honor the truce. These developments have some oil traders concerned about rising tensions in the Middle East.
 

Natural Gas

Natural Gas futures for January settled down -$.171 or -5.322% at $3.042. Natural gas prices declined on Tuesday, driven by forecasts for warmer weather in mid-December and increasing production, which are overshadowing the impact of the current cold snap in the U.S. Gas production continues to remain strong, surpassing 103 Bcf/d. While near-term demand has been solid due to frigid weather systems bringing rain, snow, and freezing temperatures across regions like the Midwest, Ohio Valley, and the Eastern U.S., updated weather models suggest a shift toward milder conditions by mid-December, reducing expectations for sustained demand. The most recent EIA Weekly Storage Report showed a slight drop of 2 Bcf, leaving the total working gas in storage at 3,967 Bcf as of November 22, 2024.


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