Oil and Gas Prices - Dec 24
Posted: Tue Dec 24, 2024 9:39 am
Trading Economics
WTI crude oil futures rose to around $69.5 per barrel on Tuesday, reversing losses from the previous session amid thin pre-holiday trading. Oil found support after fresh US data indicated that the economy of the key consumer remained strong heading into the year-end. Additionally, India's crude oil imports increased 2.6% year-on-year to 19.07 million metric tons in November, driven by strong demand amid rising economic and travel activity. However, concerns about potential oversupply next year kept prices under pressure. European supply fears also eased after reports that the Druzhba pipeline resumed operations following technical issues at a Russian pumping station. At the same time, a stronger US dollar weighed on the dollar-denominated commodity, and recent comments from Asia’s top refiner, Sinopec, projecting China’s oil consumption to peak in 2027, added further pressure.
US natural gas futures rose further to over $3.7 per MMBtu, the highest in over one year, as bets of stronger global LNG demand magnified the outlook of higher domestic consumption. Fresh forecasts of a cold front in the US halfway through January drove the industry to raise demand forecasts by 18 billion cubic feet into the weekend. This coincided with data from the EIA showing that gas storage fell by over 100bcf for the second straight week, deepening the anticipated start to the withdrawal season. In turn, the decreasing likelihood that Europe will continue to receive Russian gas through Ukraine drove investors to take long LNG positions as EU members search for alternative gas sources. This raises demand for US LNG at the turn of the US presidency, with President-elect Trump pledging to issue more LNG export permits, driving firms to favor more profitable exports instead of cheaper gas sales domestically due to the ample domestic supply.
WTI crude oil futures rose to around $69.5 per barrel on Tuesday, reversing losses from the previous session amid thin pre-holiday trading. Oil found support after fresh US data indicated that the economy of the key consumer remained strong heading into the year-end. Additionally, India's crude oil imports increased 2.6% year-on-year to 19.07 million metric tons in November, driven by strong demand amid rising economic and travel activity. However, concerns about potential oversupply next year kept prices under pressure. European supply fears also eased after reports that the Druzhba pipeline resumed operations following technical issues at a Russian pumping station. At the same time, a stronger US dollar weighed on the dollar-denominated commodity, and recent comments from Asia’s top refiner, Sinopec, projecting China’s oil consumption to peak in 2027, added further pressure.
US natural gas futures rose further to over $3.7 per MMBtu, the highest in over one year, as bets of stronger global LNG demand magnified the outlook of higher domestic consumption. Fresh forecasts of a cold front in the US halfway through January drove the industry to raise demand forecasts by 18 billion cubic feet into the weekend. This coincided with data from the EIA showing that gas storage fell by over 100bcf for the second straight week, deepening the anticipated start to the withdrawal season. In turn, the decreasing likelihood that Europe will continue to receive Russian gas through Ukraine drove investors to take long LNG positions as EU members search for alternative gas sources. This raises demand for US LNG at the turn of the US presidency, with President-elect Trump pledging to issue more LNG export permits, driving firms to favor more profitable exports instead of cheaper gas sales domestically due to the ample domestic supply.