Your Daily Energy Report for May 24, 2024
Posted on 2024-05-24
Crude Oil
Crude Oil futures for July settled up $.85 or 1.106% at $77.72. Oil prices increased on Friday but are on track for a weekly decline due to persistent worries that prolonged high inflation could result in sustained elevated interest rates, reducing fuel demand. The Federal Reserve's latest policy meeting minutes, released on Wednesday, revealed that policymakers are debating if the current interest rates are sufficient to control persistent inflation. Some members are open to further rate hikes if inflation rises. The market is looking ahead to a June 2 online meeting of the OPEC+ producer group, where discussions will center on whether to continue the voluntary oil output cuts of 2.2 million barrels per day. This week, Russia acknowledged surpassing its OPEC+ production quota in April due to "technical reasons," a rare admission that highlights Moscow's difficulties in limiting output, according to analysts and industry sources. The EIA reported on Wednesday that U.S. gasoline product supplied, an indicator of demand, hit its highest level since November in the week ending May 17.
Natural Gas
Natural Gas futures for July settled down -$.15 or -5.132% at $2.773. US natural gas futures continued their decline on Friday, posting a 4% weekly loss due to excess supply and increased production. Output has risen by 1.5 bcfd since hitting a 15-week low on May 1, suggesting that some producers have ramped up operations in response to higher prices. Despite this increase, overall production in 2024 remains about 8% lower due to earlier cutbacks by major companies like EQT and Chesapeake Energy. In Texas, power consumption is set to break a May record due to a heatwave, with potential for further increases over the Memorial Day weekend driven by heightened air conditioning use.