Your Daily Energy Report for May 28, 2024
Posted on 2024-05-28
Crude Oil
Crude Oil futures for July settled up $2.11 or 2.715% at $79.83. Oil prices experienced a big jump on Tuesday, driven by expectations that OPEC+ will continue its crude supply restrictions at the upcoming June 2 meeting. Additional factors such as the commencement of the U.S. summer driving season and a weaker dollar also supported the price increase. For the online meeting of OPEC+ oil producers scheduled for Sunday, market participants are forecasting that the voluntary production cuts of 2.2 million barrels per day will be upheld. Concerns about U.S. interest rates staying high for an extended period contributed to a decline in crude prices last week. Higher interest rates increase borrowing costs, potentially slowing economic activity and reducing oil demand. Investors are also focusing on the U.S. core personal consumption expenditures (PCE) price index, an important inflation measure for the Federal Reserve, which will be released on Friday.
Natural Gas
Natural Gas futures for July settled up $.052 or 1.875% at $2.825. U.S. natural gas futures are climbing on Tuesday after rebounding from early session declines. Following substantial selling late last week, natural gas futures were influenced by a rise in production and varied June weather forecasts as the front-month contract neared expiration. EIA data revealed a 0.4 billion cubic feet increase in natural gas supply to the U.S. for the week ending May 22nd, driven by higher Canadian imports. In contrast, consumption dropped by 0.4 billion cubic feet despite a slight uptick in LNG pipeline receipts. The EIA also reported that gas inventories are 28.8% above the five-year average, unaffected by increased demand from other major LNG hubs.