Coquest

Your Daily Energy Report for February 5, 2025

Posted on 2025-02-05

Crude Oil

Crude Oil futures for March settled down -$1.67 or -2.297% at $71.03. Oil prices fell on Wednesday after an EIA report revealed a larger-than-expected increase in US crude inventories. Stocks surged by 8.664 million barrels last week, marking the biggest build in nearly a year, exceeding the forecasted 2.6 million barrel rise and API's reported increase of 5.025 million barrels. Gasoline stocks rose, while distillates saw a decline. Trade tensions between the US and China exacerbated concerns, with China imposing tariffs on American coal, LNG, and crude oil, sparking fears of weakened global demand. Conversely, US sanctions on Iran bolstered prices, with President Trump's "maximum pressure" campaign targeting a complete halt of Iran's oil exports, potentially eliminating 1.5 million barrels per day from the market.
 

Natural Gas

Natural Gas futures for March settled up $.107 or 3.289% at $3.360. Natural gas prices climbed on Wednesday, hitting a one-week peak as colder weather projections fueled expectations of stronger heating demand and higher gas flows to LNG export facilities. Data from financial firm LSEG indicated that average gas production in the Lower 48 states rebounded to 106.0 bcfd in February, recovering from January’s freeze-offs that had temporarily curtailed output. Despite this, daily production was expected to dip slightly, reaching a one-week low of 105.3 bcfd. Analysts suggest that the recent extreme cold may have triggered record-breaking gas withdrawals from storage. Meteorologists predict a shift to below-average temperatures between February 9-14, which is expected to further support demand. As a result, LSEG anticipates total gas consumption, including exports, to rise from 123.1 bcfd this week to 134.1 bcfd in the coming week.

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