Coquest

Your Daily Energy Report for December 6, 2024

Posted on 2024-12-06

Crude Oil

Crude Oil futures for January settled down -$1.10 or -1.611% at $67.20. Oil prices fell on Friday, driven by concerns over a potential supply glut in 2025, which outweighed OPEC+'s recent decision to extend production cuts and delay planned output increases until the end of 2026. OPEC+, which controls about half of global oil production, has pushed back its planned return to higher output levels to April 2025, while continuing its current reductions. This decision comes amid softening global demand, especially in China, and rising production from non-OPEC+ countries, which have repeatedly delayed the group's plans. Although analysts have slightly adjusted their surplus predictions, they still expect the market to be oversupplied next year. HSBC now expects a smaller surplus of 0.2 million bpd, reduced from an earlier estimate of 0.5 million bpd. Meanwhile, Bank of America projects that increasing surpluses will push Brent crude prices to an average of $65 per barrel in 2025.
 

Natural Gas

Natural Gas futures for January settled down -$.003 or -.097% at $3.076. Natural gas prices dropped on Friday following a smaller-than-expected storage drawdown, according to the EIA. Utilities withdrew 30 billion cubic feet of natural gas during the week ending November 29, less than the anticipated 43 billion cubic feet, leaving inventories at 3,937 billion cubic feet. Prices for natural gas have fallen more than 8% this week, as forecasts predict a shift from colder-than-usual weather through December 7 to warmer conditions thereafter, likely leading to reduced heating demand. On the supply side, production in the Lower 48 states increased to 102.3 bcfd in December, up from 101.5 bcfd in November, but still below last December’s record of 105.3 bcfd. Analysts expect production to rise in 2025, driven by stronger LNG export demand and a recovery in prices.

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