Energy Prices Struggle to Find Momentum

Crude Oil

Supply rose – prices are volatile

• Total US Crude Net Supply (Production + Imports – Exports) have strengthened +4.8% compared to the same period last year.
• WTI crude futures rose toward $83.9 per barrel on Friday and were set to gain about 2% on the previous week, underpinned by an improving demand outlook and persistent supply risks related to the Middle East conflict.
• Weaker-than-expected US economic data also reignited hopes for Federal interest rate cuts this year.
• Elsewhere, latest data showed that US crude inventories fell by 6.37 million barrels last week, defying expectations for a 1.6-million-barrel build.

Gasoline

Gasoline prices inched – supply seems restrained

• Finished motor gasoline supply has lowered -6% on a yearly basis.
• Gasoline futures in the US traded above the $2.75 per gallon mark, rebounding slightly from the four-week low of $2.69 touched on April 22nd amid a fresh decline in domestic inventories.
• The latest report from the EIA showed that gasoline stocks fell by 634 thousand barrels on the week ending April 19th, extending the 1.15-million-barrel draw from the earlier week, and magnifying the press on supply amid the sharper-than-expected 6.38 million decline in crude oil stocks.
• Supply concerns were also present in foreign markets, amid continued pressure on the capacity of Russian refineries due to maintenance issues, floods, and attacks from Ukrainian drones.

Natural Gas

LNG inventory remains strong, prices are stable

• LNG storage in the US is up 21%, raising concerns for oversupply in the long term.
• US natural gas futures for June delivery fell toward $1.9 MMBtu, the lowest in 2 weeks, weighed by reduced feedgas to Freeport LNG’s Texas export terminal and an abundant surplus of gas in storage.
• Freeport LNG, a major U.S. liquefied natural gas export facility, has experienced multiple outages this year, with all processing units offline recently.
• Meanwhile, the latest EIA report showed US utilities added 92 billion cubic feet of gas into storage during the week ended April 19th, 2024, the biggest rise in six months, compared with market expectations of an 87 bcf increase.