Your Daily Energy Report for May 20, 2024
Posted on 2024-05-20
Crude Oil
Crude Oil futures for June settled down -$.26 or -.325% at $79.80. Oil prices declined on Monday as U.S. Federal Reserve officials stated they were looking for more evidence of decreasing inflation before considering interest rate cuts. They mentioned it was too soon to confirm a consistent return to the 2% inflation target, despite recent data indicating a reduction in consumer price pressures in April. The market remained largely unaffected by political upheaval in two significant oil-producing nations, following the death of Iran's president in a helicopter crash and the postponement of Saudi Arabia's crown prince's trip to Japan due to his father's health issues. Additionally, Saudi Arabia's crude oil exports rose for the second consecutive month in March, hitting a nine-month high. Meanwhile, Russia reported damage to the Slavyansk oil refinery from a drone attack over the weekend and announced a temporary lift on its gasoline export ban until June 30, with plans to reinstate the ban from July 1 to August 31.
Natural Gas
Natural Gas futures for June settled up $.125 or 4.76% at $2.751. US natural gas futures have climbed to start the week, marking a four-month peak and building on last week's 16.6% gain. This rise is driven by lower production levels and increasing demand. Warmer weather is expected until the end of May, leading to higher gas usage as power generators prepare for the increased need for air conditioning. Additionally, there is a rise in gas flows to major US LNG export facilities, with the Freeport plant resuming operations. Despite these price-driving factors, the latest EIA report indicates that US gas inventories are 30.8% higher than the five-year average. Meanwhile, China is expanding its presence in Iraqi oil and gas by signing a preliminary agreement with Iraq's state-owned Midland Oil Company to develop the Mansuriya gas field with a Chinese-Iraqi consortium.