Coquest

Your Daily Energy Report for December 27, 2024

Posted on 2024-12-27

Crude Oil

Crude Oil futures for February settled up $.98 or 1.408% at $70.60. Oil prices climbed on Friday, driven by a continued drop in U.S. oil inventories and mixed signals about future global supply and demand. According to the EIA, U.S. crude stocks fell by 4.3 million barrels in the week ending December 20, surpassing market expectations of a 2 million barrel decline and an earlier industry estimate of a 3.2 million barrel reduction. This marks the fifth consecutive weekly decrease. Despite a 1.5% weekly rise, WTI futures are on track for a 1% annual decline. Concerns about slowing fuel demand in China, the world’s largest crude importer, are intensifying amid weaker economic indicators. At the same time, increased output from Canada, the U.S., and Brazil could counterbalance ongoing OPEC+ production cuts. Uncertainty lingers, however, as U.S. President-elect Trump may prioritize boosting domestic oil production while imposing stricter sanctions on Iran’s energy sector.
 

Natural Gas

Natural Gas futures for January settled down -$.201 or -5.41% at $3.514. Natural gas prices experienced a decline while prices for February showed gains after the EIA reported a smaller-than-anticipated storage reduction of 93 billion cubic feet for the week ending December 20, falling short of the projected 99 bcf decrease. This leaves total inventories at 3,529 bcf. Price support came from updated European weather models showing colder conditions for early January, contrasting with previous forecasts of milder temperatures. Meanwhile, natural gas production in the Lower 48 states averaged 103.1 bcf per day in December, with LNG exports projected to reach a record-high 14.8 bcf per day, driven by robust global demand. National demand expected to remain light through early January despite mixed weather forecasts.

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