Energy Prices Plunged

Crude Oil

WTI futures tumbled despite falling inventory

• WTI crude oil futures slipped 1.6% to settle at $67.2 per barrel, booking a weekly drop of nearly 1%, as concerns about a supply surplus in 2025 overshadowed OPEC+’s recent decision to delay planned output increases and extend production cuts until the end of 2026
• Currently, OPEC+ is withholding 5.86 million bpd, about 5.7% of global demand, to support prices
• Furthermore, U.S. data painted a mixed picture, with crude stockpiles falling by over 5 million barrels—the largest weekly drop since August—but production reaching a record high, emphasizing robust supply outside OPEC+
• Elsewhere, China is preparing new economic targets for 2025, while Brazil’s oil production, a key source outside OPEC, fell 6% m/m and 8% y/y

Gasoline

Gasoline prices pressured downward on OPEC+ optimistic output

• US gasoline futures edged closer to $1.90 per gallon, after OPEC+ confirmed it will maintain current oil production levels through Q1 2025, with plans to gradually increase output until September 2026
• Additional support came from U.S. sanctions on entities transporting Iranian oil, potentially tightening global supply
• Gasoline inventories rose (+2.36m barrels) more than expected, adding to bearish market sentiment. This was the 3^rd straight weekly build-up
• Traders are also monitoring China’s upcoming economic plans for potential stimulus measures

Natural Gas

Natural gas prices fell amid favorable weather conditions

• US natural gas futures dipped toward $3/MMBtu after a smaller-than-expected storage drawdown reported by the EIA
• Utilities withdrew 30 bcf of natural gas in the week ending November 29, below market expectations of a 43 bcf draw, leaving inventories at 3,937 bcf
• Natural gas prices were down over 8% previous week, as forecasts suggest a shift from colder-than-normal weather through December 7 to warmer-than-normal conditions afterward, likely reducing heating demand
• Analysts anticipate production increases in 2025, driven by stronger LNG export demand and recovering prices