Coquest

Your Daily Energy Report for May 7, 2025

Posted on 2025-05-07

Crude Oil

Crude Oil futures for June settled down -$1.02 or -1.726% at $58.07. Oil prices declined on Wednesday, driven by increased economic uncertainty and cautious optimism ahead of upcoming US-China trade negotiations. Both oil benchmarks reached their lowest levels in four years this week due to OPEC+ ramping up production, which raised concerns about oversupply amidst reduced demand stemming from the US-China trade tensions. The trade talks, scheduled in Switzerland, are viewed as a potential initial step towards easing the trade conflict that has disrupted global markets, although hopes for a significant breakthrough remain modest. The Federal Reserve's decision to maintain interest rates highlighted concerns over mounting inflation and unemployment, contributing to market hesitancy. Fed Chair Powell indicated a patient stance, emphasizing that it is premature to determine whether inflation or unemployment risks will predominate.
 

Natural Gas

Natural Gas futures for June settled up $.158 or 4.563% at $3.621. Natural gas jumped today, reversing two consecutive days of declines, as lower production levels and unprecedented LNG export activity supported prices. Output was expected to fall by nearly 4.8 bcfd, reaching its lowest level in over a month at 102.6 bcfd on Tuesday. The U.S. continues to lead globally in liquefied natural gas exports, bolstered by strong overseas demand, even as domestic consumption shows signs of softening. In April, LNG shipments averaged a record 16.0 bcfd. Weather forecasts suggest above-average warmth across most of the continental U.S. through late May, which could contribute to substantial inventory additions. Analysts anticipate that the combination of moderate temperatures and elevated supply might push gas injections to unprecedented levels for the month.
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