Your Daily Energy Report for June 3, 2024
Posted on 2024-06-03
Crude Oil
Crude Oil futures for July settled down -$2.77 or -3.598% at $74.22. Oil prices fell by over $2 a barrel on Monday, reaching their lowest point in nearly four months. This drop was driven by investor concerns about demand and a complex OPEC+ decision, interpreted as a signal that members were keen to export more oil. On Sunday, OPEC+ decided to extend most of its significant oil production cuts into 2025 but allowed for the gradual reversal of voluntary cuts by eight members starting in October. Additionally, the group set a new production target for the United Arab Emirates, which had been advocating for a higher quota. Recent signs of slowing demand growth have also impacted oil prices, with U.S. fuel consumption data being closely watched. The U.S. Energy Information Administration is set to release its estimates of oil stocks and fuel demand on Wednesday, providing insights into gasoline consumption during the Memorial Day weekend, the start of the U.S. driving season.
Natural Gas
Natural Gas futures for July settled up $.169 or 6.533% at $2.756. Natural gas futures in the US rose by over 5% on Monday, adding to a 30% increase observed in May due to rising demand from summer heat. Forecasts show continued high demand through mid-June, particularly in the western regions. Gas flow to LNG export facilities has increased, notably with the Freeport LNG plant in Texas resuming operations. However, prices fell by more than 6.5% last week as increased gas extraction by some producers raised concerns about oversupply. The latest EIA report shows gas stockpiles are about 26.5% above the seasonal average. Traders should closely monitor weather patterns and LNG export activities, as these will significantly impact market trends in the upcoming weeks.