Oil & Gas Prices - Jan 10

[dan_s]

Trading Economics

WTI crude oil futures rose over 2% to surpass $75.5 per barrel on Friday, reaching the highest level since October, driven by a drop in US crude stockpiles. Cold weather in the US reduced inventory levels at Cushing, Oklahoma, to their lowest since 2014. The global oil market is tightening due to reduced supply from key exporters like Russia and Iran, as well as a surge in demand for heating fuels. The rise in oil prices is also linked to fears surrounding US policy under President-elect Donald Trump, including potential sanctions on Iran and trade conflicts that could disrupt energy flows. Trump’s plans to authorize new drilling and impose tariffs on Canadian imports, including oil, further heightened market concerns. Oil is now heading for its third consecutive weekly gain.

US natural gas futures rose above $3.8/MMBtu, driven by disruptions in supply and strong global demand. US utilities have been withdrawing natural gas from storage, with colder-than-normal weather expected to persist through January. In the week ending January 3rd, US utilities withdrew 40 billion cubic feet of natural gas, lowering total stockpiles to 3,373 bcf. This marked the eighth consecutive draw in inventories, aligning with the typical start to the withdrawal season. While freeze-offs were less severe than in previous years, cold temperatures in the eastern US caused production disruptions, with daily gas supply dipping to a six-week low. These supply constraints have been compounded by rising gas flows to LNG export plants, driven by Europe's shift away from Russian pipeline supplies. With extreme cold weather forecasted to continue, concerns over further supply tightening are pushing prices higher.