Coquest

Your Daily Energy Report for January 14, 2025

Posted on 2025-01-14

Crude Oil

Crude Oil futures for February settled down -$1.32 or -1.675% at $77.50. Oil prices dropped on Tuesday, following three consecutive days of gains, as investors engaged in profit-taking. The previous day, prices reached a five-month high amid heightened U.S. sanctions on Russia's energy sector, raising concerns about global supply disruptions. The sanctions targeted major producers and hundreds of vessels, prompting key buyers like India and China to find alternative suppliers. Early effects are evident, with India announcing a ban on discharging from sanctioned vessels, while China has turned to oil sources from the UAE and Oman. Meanwhile, six European nations urged the EU to lower its $60 per barrel price cap on Russian oil to weaken Russia's ability to fund its military activities in Ukraine. However, softer demand from China could offset supply constraints, as the country’s crude oil imports declined in 2024—the first such drop in two decades, excluding the pandemic years.
 

Natural Gas

Natural Gas futures for February settled up $.034 or .864% at $3.968. Natural gas prices increased today, bouncing back from a dip the previous day. The rise was attributed to forecasts of colder weather expected next week, which could drive daily demand to record levels. This occurred even as current heating needs remain lower and production disruptions from frozen wells have eased. Speculative traders increased their long positions to the highest point since February 2022. Analysts predict that upcoming storage data will reveal a withdrawal of more than 200 billion cubic feet of gas, potentially surpassing the record set in January 2022. Such significant withdrawals could deplete the current storage surplus and bring stockpiles below the five-year average by the month’s end.

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