Coquest

Your Daily Energy Report for December 19, 2024

Posted on 2024-12-19

Crude Oil

Crude Oil futures for January settled down -$.67 or -.949% at $69.91. Oil prices dropped on Thursday, reversing the prior session's gains as the strength of the US dollar put pressure on the dollar-based commodity. The greenback climbed to its highest level in over two years after Federal Reserve officials lowered borrowing costs as anticipated but indicated fewer rate cuts in the coming year. This more gradual approach to easing raised concerns about its potential effects on fuel demand. On the other hand, oil prices found some support after the EIA reported a nearly 1 million barrel drop in US crude oil inventories during the second week of December, building on the 1.4 million barrel decline from the previous week. Additionally, Kazakhstan reversed its earlier decision to boost output and confirmed it would adhere to OPEC+'s extended oil production cuts next year, joining the UAE in supporting the continuation of the reductions.
 

Natural Gas

Natural Gas futures for January settled up $.21 or 6.224% at $3.584. Natural gas prices continued their upward trend on Thursday, reaching $3.50 per MMBtu, the highest level in over a year. This surge was fueled by expectations of stronger global LNG demand alongside solid domestic consumption. According to EIA data, utilities withdrew over 100 billion cubic feet of natural gas from storage for the second consecutive week, extending the anticipated withdrawal period. Additionally, uncertainty about the future of Russian gas deliveries to Europe via Ukraine prompted investors to take long positions in LNG, as EU nations seek alternative gas sources. This situation is boosting demand for US LNG, especially as President-elect Trump has pledged to issue more LNG export permits, encouraging companies to prioritize more lucrative exports over domestic sales.

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