Your Daily Energy Report for May 21, 2024
Posted on 2024-05-21
Crude Oil
Crude Oil futures for June settled down -$.54 or -.677% at $79.26. Oil prices dipped on Tuesday, influenced by ongoing U.S. inflation, which is expected to maintain elevated interest rates for a longer period, potentially reducing consumer demand at gas stations. Despite the approach of Memorial Day weekend, marking the beginning of the U.S. peak summer driving season, retail gasoline prices decreased for the fourth straight week to $3.58 per gallon as of Monday, according to the EIA's latest update. Diesel prices also fell, dropping 5.9 cents for the week. Diesel is crucial for both the industrial and transportation sectors. Additionally, Federal Reserve officials suggested that interest rates might remain higher for longer than previously anticipated. On the supply side, the diminishing geopolitical risk premium from the Gaza conflict provided little support. The market showed minimal reaction to the death of Iranian President Ebrahim Raisi, in a helicopter crash on Sunday.
Natural Gas
Natural Gas futures for June settled down -$.08 or -2.908% at $2.671. Natural gas futures declined in early trading on Tuesday, casting doubt on the sustainability of the recent rally seen this month. The primary contractor for a Texas liquefied natural gas (LNG) facility, a project by Qatar Energy and Exxon Mobil, filed for Chapter 11 bankruptcy protection on Tuesday due to difficulties encountered at the site. Zachry Holdings, responsible for the majority of the $10 billion Golden Pass LNG construction project, announced it was seeking a "structured exit." Exxon stated it would reassess the project's timeline and provide an update later. Weather forecasts predict warmer temperatures until May 29, leading to increased gas consumption as power generators boost output to meet the higher electricity demand for air conditioning.