Coquest

Your Daily Energy Report for January 17, 2025

Posted on 2025-01-17

Crude Oil

Crude Oil futures for February settled down -$.80 or -1.017% at $77.88. Oil prices slipped on Friday, as anticipation of a ceasefire deal in Gaza raised hopes of decreased risks to shipping routes impacted by Yemen's Houthi militia. However, oil prices still recorded their fourth consecutive weekly increase, climbing over 1%, largely due to concerns about fresh U.S. sanctions aimed at Russian oil companies and tankers, which could strain global supplies. Market experts noted that these worries, combined with expectations of U.S. interest rate cuts driven by lower inflation, have provided significant support to the oil market. Additionally, the possibility of stricter sanctions on Russian oil under a prospective Donald Trump administration and signs of economic recovery in China, which may boost demand, have contributed to the positive outlook for crude prices.
 

Natural Gas

Natural Gas futures for February settled down -$.31 or -7.28% at $3.948. Natural gas prices eased from a two-year peak today, as updated forecasts indicated milder weather for February. Overnight changes in the American weather model significantly reduced heating degree days (HDD) by 13. This comes after a three-day price increase fueled by expectations of a cold spell over the Martin Luther King Jr. Day weekend, which could disrupt gas wells and pipelines, leading to higher heating demand. Recent federal data revealed a substantial withdrawal of 258 billion cubic feet (bcf) of gas from storage for the week ending January 10, well above last year’s 150 bcf draw for the same period and the five-year average of 128 bcf. Analysts are forecasting even larger withdrawals, surpassing 200 bcf, for the weeks ending January 17 and 24 as heating needs intensify. Additionally, record-high gas flows to the eight major U.S. LNG export facilities have further elevated demand.

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