Coquest

Your Daily Energy Report for January 27, 2025

Posted on 2025-01-27

Crude Oil

Crude Oil futures for February settled down -$1.49 or -1.996% at $73.17. Oil prices fell on Monday, hitting a monthly low. The drop followed a decline in tech and energy stocks, triggered by the sudden rise of DeepSeek, a Chinese AI startup, surpassing ChatGPT in popularity on Apple’s App Store. Economic data from China earlier in the day showed a contraction in factory activity, raising concerns about reduced demand from the world’s largest oil importer. Additionally, fears mounted over potential U.S. tariffs that could strain economic growth and energy demand. Meanwhile, a brief disagreement between the U.S. and Colombia regarding migrant policies briefly unsettled markets, although it was resolved without sanctions. Amid these challenges, Saudi Arabia hinted at plans to increase oil prices for Asia, reflecting tighter global supplies resulting from OPEC+ production cuts and recent U.S. sanctions on Russian oil exports.
 

Natural Gas

Natural Gas futures for February settled down -$.33 or -8.195% at $3.697. Natural gas prices tumbled today, hitting a two-week low following weekend forecasts predicting milder weather for early February. While a significant winter storm is set to bring heavy snow to the Southwest and Plains and severe weather to the Southeast and Gulf Coast, its effects are expected to be moderated by limited Arctic air. This storm could mark the beginning of a broader shift in weather patterns as February approaches. Analysts are projecting a 317 bcf draw in gas storage for the week ending January 24, which could eliminate the surplus in gas inventories compared to the five-year average for the first time since early 2022. Gas flows to LNG export facilities are anticipated to rise, partly driven by the restart of operations at Freeport LNG's Texas plant following a recent shutdown.

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