Oil and Gas Prices - Nov 8
Posted: Fri Nov 08, 2024 2:56 pm
Trading Economics:
Oil
WTI crude oil futures fell 3% to $70 per barrel amid renewed demand concerns following China’s newly announced stimulus measures, which fell short of market expectations.
> China's top legislative body approved a $1.4 trillion package to help local governments manage off-balance-sheet debt but withheld new fiscal stimulus, disappointing investors facing additional economic uncertainties, including the return of Donald Trump.
> Oil prices were already pressured as supply risks eased; Hurricane Rafael, which disrupted U.S. crude production, is expected to weaken and gradually move away from Gulf Coast oilfields.
> Additionally, investors weighed the potential market impacts of Trump’s upcoming presidency. Initially, crude prices dipped as the dollar strengthened following his victory, though prices later rebounded on speculation that Trump may impose sanctions on Iranian oil supplies.
MY TAKE is that Trump will impose sanctions on Iran and maybe on Venezuela. Saudi Arabia and their friends in OPEC+ will be more than happy to fill the supply gap. Saudi Arabia is very happy that Trump won.
US natural gas futures rose above $2.7/MMBtu, on track for a weekly gain, driven by forecasts for cooler weather and higher heating demand than expected. At the same time, lower production levels due to pipeline issues and Gulf of Mexico curtailments ahead of Hurricane Rafael added upward pressure on prices. The storm was expected to weaken into a tropical storm as it moved across the Gulf, reducing concerns about long-term disruptions. Energy companies had already cut production in the Gulf by about 10%. Meanwhile, the U.S. Energy Information Administration (EIA) reported a 69 billion cubic feet (bcf) increase in gas storage for the week ending Nov. 1, slightly surpassing the forecasted 65 bcf and significantly higher than last year's 19 bcf gain.
Oil
WTI crude oil futures fell 3% to $70 per barrel amid renewed demand concerns following China’s newly announced stimulus measures, which fell short of market expectations.
> China's top legislative body approved a $1.4 trillion package to help local governments manage off-balance-sheet debt but withheld new fiscal stimulus, disappointing investors facing additional economic uncertainties, including the return of Donald Trump.
> Oil prices were already pressured as supply risks eased; Hurricane Rafael, which disrupted U.S. crude production, is expected to weaken and gradually move away from Gulf Coast oilfields.
> Additionally, investors weighed the potential market impacts of Trump’s upcoming presidency. Initially, crude prices dipped as the dollar strengthened following his victory, though prices later rebounded on speculation that Trump may impose sanctions on Iranian oil supplies.
MY TAKE is that Trump will impose sanctions on Iran and maybe on Venezuela. Saudi Arabia and their friends in OPEC+ will be more than happy to fill the supply gap. Saudi Arabia is very happy that Trump won.
US natural gas futures rose above $2.7/MMBtu, on track for a weekly gain, driven by forecasts for cooler weather and higher heating demand than expected. At the same time, lower production levels due to pipeline issues and Gulf of Mexico curtailments ahead of Hurricane Rafael added upward pressure on prices. The storm was expected to weaken into a tropical storm as it moved across the Gulf, reducing concerns about long-term disruptions. Energy companies had already cut production in the Gulf by about 10%. Meanwhile, the U.S. Energy Information Administration (EIA) reported a 69 billion cubic feet (bcf) increase in gas storage for the week ending Nov. 1, slightly surpassing the forecasted 65 bcf and significantly higher than last year's 19 bcf gain.