Oil & Gas Prices - Nov 6

[dan_s]

Trading Economics (before the markets opened)

Oil
WTI crude oil futures dropped over 1% to around $71 per barrel on Wednesday, ending a five-day gain streak, driven by a stronger US dollar following the election of Donald Trump as president.
> Adding to the woes, many analysts anticipate that a Trump presidency could lead to policies that might further strain China's economy, potentially reducing demand for oil, given that China is the world’s largest oil importer.
> Additionally, US crude inventories increased more than expected, rising by 3.13 million barrels, surpassing the forecasted 1.1 million-barrel increase. < This is the time of the year when crude oil inventories need to build.
> Meanwhile, oil producers in the US Gulf of Mexico began shutting operations and evacuating workers due to Tropical Storm Rafael, which was expected to strengthen into a Category 1 hurricane, adding to concerns about potential disruptions.

Natural Gas
US natural gas futures rose toward $2.7/MMBtu as oil and gas producers in the Gulf of Mexico began shutting operations ahead of Hurricane Rafael, which strengthened into a Category 1 storm with winds reaching 90 mph. The storm is moving toward Cuba and could intensify before landfall. < Rafael is expected to weaken after it crosses Cuba and then weaken further when it runs into a strong front and dryer air. It should not be a threat to the Gulf Coast, but it will cause production shut-ins.
>Looking ahead, temperatures are expected to remain above average until mid-November, with cooler weather forecasted later in the month.
> Meanwhile, US LNG exports are falling this month largely due to a temporary shutdown at Freeport LNG.
> LNG exports are expected to increase in late 2024 and into 2025, driven by new LNG facilities like Venture Global’s Plaquemines plant and Cheniere Energy’s Texas expansion. Despite this, prices remain over 10% lower than October’s $3.1/MMBtu due to low heating demand and high inventories.