Coquest

Your Daily Energy Report for January 22, 2025

Posted on 2025-01-22

Crude Oil

Crude Oil futures for February settled down -$.45 or -.593% at $75.44. Oil prices dropped on Wednesday, marking a fourth consecutive decline. This followed renewed concerns over escalating trade tensions as US President Donald Trump hinted at imposing a 10% tariff on China, a significant oil consumer. Trump's remarks came amid ongoing scrutiny over potential tariffs on Canada and Mexico announced earlier. Additionally, market sentiment was influenced by Trump's efforts to enhance domestic oil production through emergency measures, which include easing permitting processes, expanding acreage access, and reversing clean energy policies from the Biden administration. Furthermore, recent US sanctions on Russia disrupted physical oil and tanker markets, providing some sustained support to oil prices. Meanwhile, a winter storm swept through the US on Tuesday, contributing to a decline in North Dakota's oil production by 130,000 to 160,000 barrels per day, according to the state's pipeline authority.
 

Natural Gas

Natural Gas futures for February settled up $.204 or 5.431% at $3.960. Natural gas prices climbed today, driven by a surge in demand during an intense cold spell. January 21 marked the coldest day in several years, significantly increasing heating needs and pushing spot gas and electricity prices to their highest levels in years. Energy analysts anticipate that companies will draw more than 200 bcf of gas from storage for two straight weeks, potentially eliminating a slight surplus in inventories compared to the five-year average. However, demand is expected to decline as weather forecasts suggest milder conditions from late January into early February. Additionally, a rare winter storm along the Gulf Coast caused operational disruptions at Freeport LNG’s Texas export facility, reducing feedgas demand to a six-week low of 13.3 bcfd.

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