Energy commodities suffered considerable losses last week as imminent tariffs from the US and weather conditions weigh down prices.
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Crude Oil
WTI futures tumbled to one-month low
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- WTI crude oil futures fell towards $72.5 per barrel on the last session of January, closing the month with an over 0.8% loss.
- A steep decline from multi-months $80 high was attributed to traders’ assessment of the impact of US tariffs on Canada and other oil suppliers, alongside concerns over rising stockpiles.
- President Trump’s plan to impose 25% tariffs on Canada and Mexico beginning on February 1st added pressure, as Canada is a major US crude supplier.
- This weakened Canadian oil prices as US stockpiles rose by 3.463 million barrels, marking the first increase after nine consecutive weeks of decline.
- Additionally, easing supply worries from Libya and the outlook for OPEC+ production decisions contributed to the broader market pullback.
Gasoline
Gasoline prices hover around $2
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- US gasoline futures plateaued to $2.04 per gallon after hitting a three-week low as traders awaited clarity on President Trump’s tariffs.
- Earlier, energy markets were supported by fresh US sanctions on Russia’s oil sector, which had raised concerns about global supply disruptions.
- Gasoline inventories surged by 2.96 million barrels last week, exceeding forecasts of a 1.5 million barrel buildup.
- Oil-related commodities have been under pressure as Trump urged OPEC to lower prices.
Natural Gas
Natural gas plummeted on improved weather conditions
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- US natural gas futures dropped below $3.1/MMBtu, near a month low, due to warmer-than-expected weather forecasts for early February.
- While colder weather in the Midwest and Northeast will bring moderate demand this week, most regions are expected to stay warmer than usual over the next two weeks.
- Meanwhile, the EIA reported a massive gas withdrawal due to last week’s extreme cold.
- US utilities pulled 321 bcf from storage for the week ending Jan. 24 – well above last year’s 234 bcf drop and the five-year average of 189 bcf.
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