Your Daily Energy Report for June 6, 2024
Posted on 2024-06-06
Crude Oil
Crude Oil futures for July settled up $1.48 or 1.998% at $75.55. Oil prices rose on Thursday after the European Central Bank reduced interest rates, boosting speculation that the Federal Reserve might do the same, while OPEC+ ministers reassured investors that their recent oil output agreement is flexible and can be adjusted based on market conditions. This marked the ECB's first rate cut since 2019, as they acknowledged progress against inflation but noted that challenges remain. U.S. analysts interpreted the ECB's move as a potential indicator of upcoming Fed rate cuts. Additionally, Trafigura's chief economist, Saad Rahim, stated that OPEC+'s plan to gradually end some output cuts, coupled with robust fuel supplies, has been a factor in lowering oil prices. Today, Saudi Energy Minister Prince Abdulaziz bin Salman emphasized that OPEC+ retains the option to halt or reverse production increases if market conditions weaken.
Natural Gas
Natural Gas futures for July settled up $.064 or 2.321% at $2.821. Natural gas futures gained on Thursday, after the EIA announced a storage increase that surpassed expectations. Utilities in the US added 98 billion cubic feet of gas to storage last week, higher than the anticipated 89 billion cubic feet. The report also highlighted that US gas inventories are 25.1% above the five-year average. Despite this, natural gas prices have climbed over 7% this week due to a recent decline in production and predictions of hotter-than-average weather later in June. Gas production averaged 98.0 billion cubic feet per day in early June, slightly down from 98.1 billion cubic feet per day in May, with a preliminary daily low of 96.3 billion cubic feet on Thursday. According to NatGasWeather, this forecast suggests strong demand until Thursday, followed by a decline.