Coquest

Your Daily Energy Report for January 8, 2025

Posted on 2025-01-08

Crude Oil

Crude Oil futures for February settled down -$.93 or -1.253% at $73.32. Oil prices dropped on Wednesday as a stronger dollar outweighed concerns about reduced supply from Russia and declining US oil inventories. The price decline followed reports suggesting President-elect Trump might invoke a national economic emergency to implement new tariffs. Despite this, oil prices received some support from US government data showing a 959,000-barrel decrease in crude stockpiles last week, marking the seventh consecutive weekly drop. Russian oil production also fell below OPEC+ targets, with exports reaching their lowest point since August 2023. Additionally, traders are bracing for colder weather in the US, which has boosted demand for heating fuel and raised the potential for freeze-offs in key production areas.
 

Natural Gas

Natural Gas futures for February settled up $.202 or 5.857% at $3.651. Natural gas prices surged on Wednesday due to supply disruptions and strong global demand. Colder-than-average weather, expected to last through January, has led U.S. utilities to draw down natural gas storage faster than anticipated. For the week ending January 3rd, 40 billion cubic feet were withdrawn, reducing total reserves to 3,373 bcf and marking the eighth consecutive inventory decline, consistent with the start of the withdrawal season. Although freeze-offs were less significant than in past years, cold conditions in the eastern U.S. caused production setbacks, with daily output hitting a six-week low. These issues, combined with increased LNG exports to Europe as it shifts from Russian gas, have tightened supply. With extreme cold weather likely to persist, concerns about further constraints are driving prices upward.

Continue reading the full Coquest Daily Report.

---