Energy Commodities Strengthen

Crude Oil

Oil prices increase +5% w/w on decreased output

• WTI crude oil futures rose above $71.2 per barrel, driving prices to a weekly gain of over 5%, the most in two months, on expectations of recovery in demand and further supply risks.
• The US S&P PMI rose to 55.3 in November, marking the fastest private sector growth since April 2022, lifting the demand outlook from the world’s top fuel consumer.
• Meanwhile, China unveiled measures to boost foreign trade, raising expectations for higher energy product imports.
• In turn, risks to fuel exports from Russia emerged after Ukraine launched its second Western-supplied missile into Russia.
• Markets are now eyeing the OPEC+ meeting on December 1st, with speculation that output increases may be delayed once again.

Gasoline

Gasoline appreciated despite unexpected strengthened inventory

• US gasoline futures settled above $2.06 per gallon, a two-week high as investors were evaluating mixed supply signals and the impact of geopolitical tensions on oil prices.
• The API recently noted a 2.48-million-barrel decline in gasoline inventories, supporting gasoline prices.
• However, EIA data reported a 2.05-million-barrel build in gasoline stockpiles for the week ending November 15th, surpassing the forecast of a 1.62-million-barrel increase and easing concerns about supply constraints.
• Equinor restored production at Western Europe’s largest oilfield after a power outage, but ongoing supply constraints at Kazakhstan’s Tengiz field, operating at 28-30% reduced output due to repairs, supported prices.

Natural Gas

Natural Gas futures reached 1-year high

• US natural gas rices fell to $3.2/MMBtu after touching a one-year high of $3.35 on November 21st amid an ample output next year.
• The EIA noted that US drillers are expected to raise output for the first time since the pandemic next year amid higher export capacity and global demand for US LNG.
• Still, prices remained nearly 20% higher in November as forecasts of colder weather expedited expectations on the start of storage withdrawing season.
• Data from the EIA showed that gas storage fell by 3 bcf on the week ending November 15th instead of expectations of a 5 bcf build, as relatively low prices in the prior week drove producers to cut output.