Your Daily Energy Report for May 29, 2024
Posted on 2024-05-29
Crude Oil
Crude Oil futures for July settled down -$.60 or -.752% at $79.23. Oil prices declined on Wednesday due to concerns over weak gasoline demand in the U.S. and economic data suggesting that the Federal Reserve might maintain higher interest rates for a longer period. These worries have kept gasoline futures prices near a two-month low, reducing refining profit margins to their lowest since February. The market is anticipating U.S. oil storage data from the American Petroleum Institute (API) later on Wednesday and the EIA on Thursday, delayed by the Memorial Day holiday. Analysts expect a drawdown of 2.0 million barrels of crude from storage for the week ending May 24, which could support crude prices. Additionally, rising tensions in the Middle East have prevented a further drop in oil prices, with Yemen's Iran-aligned Houthis attacking six ships and Iran reportedly supplying them with sea-launched ballistic missiles.
Natural Gas
Natural Gas futures for July settled down -$.159 or -5.628% at $2.666. On Wednesday, U.S. natural gas prices are falling, undoing Tuesday's gains that followed the first rally since last week's price dip. Despite forecasts for higher demand, the market remains unstable. In May, natural gas production in the Lower 48 states has averaged 97.7 billion cubic feet per day (bcfd), down from April's 98.2 bcfd, although daily output has increased by 1.5 bcfd since early May. The recent rise in futures prices has prompted some producers to increase their output. However, overall production in 2024 is still about 8% lower due to delays in well completions and reduced drilling. LNG export facilities have become more active, with gas flows rising from an average of 11.9 bcfd in April to 12.8 bcfd in May, mainly due to Freeport LNG’s Texas plant resuming operations.