Coquest

Your Daily Energy Report for March 5, 2025

Posted on 2025-03-05

Crude Oil

Crude Oil futures for April settled down -$1.95 or -2.857% at $66.31. Oil prices bounced back slightly from earlier dips but still closed lower on Wednesday. This marked the third consecutive drop, influenced by increased OPEC+ supply and escalating trade tensions. Prices briefly touched multi-year lows before a slight recovery following hints from US Commerce Secretary Howard Lutnick regarding potential tariff adjustments for certain sectors. Despite this, pressure persisted due to a significant 3.6 million barrel surge in US crude inventories, well above expectations. The market also reacted to OPEC+'s decision to incrementally increase production starting April, raising concerns about potential oversupply. Additionally, the Trump administration's decision to revoke Chevron's Venezuela operating license jeopardized 200,000 barrels per day of supply. Lingering concerns about global economic slowdown and weakening energy demand further contributed to market uncertainty.
 

Natural Gas

Natural Gas futures for April settled up $.10 or 2.299% at $4.45. Natural gas prices climbed for the third consecutive session as traders took advantage of market dips to strengthen their positions, with some colder weather still lingering late in the winter season. The market responded sharply to newly announced U.S. tariffs on Canada, China, and Mexico, raising concerns about possible retaliatory measures. However, uncertainty remains as the administration has hinted at a potential compromise. Forecasts from NatGasWeather indicate a volatile pattern through mid-March, with storm systems bringing rain and snow while temperatures swing unpredictably. At the same time, U.S. storage levels remain a key concern, with deficits surpassing 250 Bcf and little sign of improvement in the near term, sustaining a bullish outlook for prices.

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