Coquest

Your Daily Energy Report for January 3, 2025

Posted on 2025-01-03

Crude Oil

Crude Oil futures for February settled up $.83 or 1.135% at $73.96. Oil prices continued their gains on Friday, marking a two-month high. This rise was fueled by colder weather across Europe and the U.S., alongside optimism about potential economic stimulus in China. Anticipation of new policies to stimulate growth in China, the world’s top oil importer, outweighed concerns about its economic challenges and previous expectations of reduced demand. In the U.S., crude inventories dropped by 1.2 million barrels to 415.6 million, lending additional support to prices. However, gasoline and distillate stocks increased as refineries ramped up production, despite fuel demand hitting a two-year low. Forecasts for colder temperatures also suggest higher heating oil consumption, further bolstering crude prices.
 

Natural Gas

Natural Gas futures for February settled down -$.306 or -8.361% at $3.354. Natural gas prices dropped today following a smaller-than-expected inventory draw reported by the EIA. Utilities withdrew 116 billion cubic feet of gas last week, missing the anticipated 127 bcf, which brought total stockpiles to 3,414 bcf. This reduced the surplus to the five-year average to 4.7% and left inventories 1.9% lower than the same period last year. Despite the drop, prices are still poised for a weekly increase due to forecasts of colder-than-normal weather from January 6–17, which is expected to elevate heating demand. Increased gas flows to U.S. LNG export facilities are also anticipated to persist, particularly following the conclusion of a Russia-Ukraine pipeline agreement. Even so, LNG feedgas deliveries saw their first annual decline in 2024, marking a shift since U.S. LNG exports began in 2016.

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