Coquest

Your Daily Energy Report for May 6, 2025

Posted on 2025-05-06

Crude Oil

Crude Oil futures for June settled up $1.96 or 3.431% at $59.09. Oil prices increased on Tuesday, rebounding sharply after hitting levels not seen in four years. The recovery was driven in part by technical signals pointing to an oversold market, which attracted value-seeking investors. Demand also picked up as Chinese buyers returned to the market following a national holiday. Further support came from indications that U.S. shale output may begin to slow. Notably, Diamondback Energy, a key player in the Permian Basin, lowered its production outlook and flagged a potential downturn in domestic drilling. Another major shale firm also revealed plans to scale back operations, reflecting pressure from persistently low prices. In the Middle East, Saudi Arabia opted for a slight reduction in its official selling prices, hinting at a more measured approach to defending its market position after OPEC+ moved to increase supply for June.
 

Natural Gas

Natural Gas futures for June settled down -$.087 or -2.451% at $3.463. Natural gas ended lower after a session marked by choppy trading, influenced by reduced liquefied natural gas feedgas activity and only a modest increase in short-term weather-driven demand. The EIA revised its 2025 projection for dry gas output slightly downward to 104.9 Bcf/d, down from a previous estimate of 105.3 Bcf/d, though it still anticipates growth in exports via LNG terminals and pipelines. Forecasts for weather-related demand remain tepid as much of the country is expected to experience mild temperatures between May 5 and 11, with most areas seeing daytime highs in the 60s to 80s, and only a few spots trending cooler or hotter. The European Commission is preparing to unveil legislative steps aimed at completely phasing out gas imports from Russia by the close of 2027.
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