Coquest

Your Daily Energy Report for April 3, 2025

Posted on 2025-04-03

Crude Oil

Crude Oil futures for May settled down -$4.76 or -6.638% at $66.95. Oil prices had a big drop on Thursday following an unexpected announcement from eight OPEC+ countries to increase oil production by 411,000 barrels per day in May, well above the planned 135,000 bpd. OPEC attributed this decision to strong market conditions but indicated a potential pause in future increases if necessary. Prior to this, oil had already decreased by more than 4% due to U.S. President Trump's announcement of new tariffs, which raised concerns about a global trade conflict that could dampen economic growth and reduce fuel demand. Despite exemptions for oil imports, investors remained cautious about the tariffs' broader economic impact and implications for inflation. Additionally, U.S. crude inventories unexpectedly rose by 6.2 million barrels last week, driven by a surge in Canadian imports, contrasting with expectations of a 2-million-barrel decrease.
 

Natural Gas

Natural Gas futures for May settled up $.083 or 2.047% at $4.138. Natural gas prices rose today, reaching a two-week high amid declining production and expectations of increased demand. Output in the Lower 48 states is projected to drop to 104.6 bcfd on Thursday, marking a five-week low. At the same time, total demand, including exports, is forecasted to rise from 103.7 bcfd this week to 106.4 bcfd next week. Despite this, data from the EIA indicated that U.S. utilities continued to inject gas into storage for the third consecutive week. The early start to the injection season, which typically begins in April, has reduced the deficit over the year-ago and five-year average levels. Additionally, LNG exports surged to a record 15.8 bcfd in March. The uptick in gas prices occurred even as oil futures tumbled over concerns of the newly announced tariffs, while OPEC+ maintained its policy of increasing oil production.
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