Your Daily Energy Report for May 16, 2024
Posted on 2024-05-16
Crude Oil
Crude Oil futures for June settled up $.60 or .763% at $79.23. Crude prices saw a slight increase on Thursday following data indicating a stabilization in the U.S. job market. This fueled speculation that the Federal Reserve might initiate interest rate cuts in the fall, potentially stimulating economic growth and increasing oil demand. Wednesday's release of U.S. inflation figures for April, which were lower than anticipated, further fueled expectations for an interest rate cut in September. Such a move could moderate the strength of the dollar, making oil priced in dollars more affordable for holders of other currencies. Despite these factors, U.S. gasoline demand remained below 9 million barrels per day for the sixth consecutive week, a trend not typical as the summer driving season, which officially begins on the Memorial Day weekend, approaches. In the Middle East, ceasefire negotiations facilitated by Qatar and Egypt have hit a deadlock, with Hamas insisting on an end to attacks and Israel refusing until Hamas is completely eradicated.
Natural Gas
Natural Gas futures for June settled up $.079 or 3.27% at $2.495. US natural gas futures climbed on Thursday, marking their highest level in four months. This surge followed the release of an EIA report revealing a storage increase smaller than what was anticipated. Last week, US utilities injected 70 bcf of gas into storage, falling short of market projections of a 76 bcf rise. Despite this, the report highlighted that US gas reserves currently stand 30.8% above the five-year average. Looking ahead, weather forecasts suggest warmer-than-average temperatures until May 31, prompting heightened gas consumption by power plants to meet air conditioning demands.