| | | Trading Economics:
WTI Oil
WTI crude oil futures rose above $56 per barrel on Thursday, extending their rebound from a nearly five-year low, supported by rising geopolitical tensions.
> The US has ordered a full shutdown of maritime traffic involving sanctioned oil tankers operating to and from Venezuela, following last week’s escalation in which US forces seized a blacklisted tanker off the country’s coast.
> Simultaneously, Washington is moving toward tougher sanctions on Russia’s energy sector in an effort to advance peace talks over Ukraine, raising concerns over potential global supply disruptions.
> Meanwhile, EIA data showed that US crude inventories fell by 1.27 million barrels last week, marking a second consecutive decline and slightly exceeding expectations for a 1.1 million barrel draw.
> Stocks at the Cushing, Oklahoma hub also posted their largest drop in nearly two months, although gasoline and distillate inventories increased.
Natural Gas
US natural gas futures climbed more than 3% to trade above $4 per MMBtu, rebounding from seven-week lows as traders stepped in to take profits and LNG export flows strengthened.
> Average gas deliveries to the eight major U.S. LNG export facilities rose to 18.6 Bcf/d so far this month, exceeding November’s record monthly average of 18.2 Bcf/d. Meanwhile, Freeport LNG’s export terminal in Texas was set to take in higher volumes on Wednesday, suggesting that one of its three liquefaction trains has returned to service after shutting down a day earlier. < LNG exports will set new records month-after-month as three new very large LNG export facilities ramp up to their design capacity. Exports should be over 20 Bcf per day by the end of Q1 2026.
> The advance, however, may be short-lived. Weather forecasts across much of the U.S. point to above-average temperatures heading into Christmas, potentially curbing heating demand. < Miss La Nina will fix this.
> At the same time, record-high production and ample storage supplies continue to pressure prices. LSEG estimates Lower-48 natural gas output at around 109.7 Bcf/d so far in December, broadly in line with the record levels seen in November. < Today natural gas in storage is BELOW THE 5-YEAR AVERAGE. It will be confirmed next week by EIA.
Dan Steffens
Energy Prospectus Group |
|
