The Jun-2024 NYMEX natural gas contract gained 5.3 cents to $2.195 per MMBtu after a bounce off lower technical support levels and amid weaker production and strengthening LNG flows. The Jun-2024 WTI crude oil contract closed 37 cents higher at $78.48 per barrel after temporary cease-fire talks stalled and Israel told Palestinians to evacuate the southern Gaza city of Rafah. Equity markets extended recent gains on continued hope the prior week’s jobs report would speed up the Federal Reserve’s rate cut timeline.
Tuesday 5/7
Natural gas dipped 3.9 cents lower to $1.991 on expectations for muted demand as weather forecasters called for moderate temperatures for much of the country into mid-May. Crude lost 70 cents to land at $81.93 on demand concerns after a Chicago-area manufacturing index fell to its lowest level since November 2022. Equity markets tumbled lower as investors anticipated the Federal Reserve would leave interest rates unchanged at the conclusion of their two-day policy meeting.
Wednesday 5/8
Natural gas edged 2.0 cents lower to $2.187 ahead of the next day’s storage report, which was expected to show a build around 80 Bcf that would be in line with the 5-year average. Oil prices rebounded 61 cents to $78.99 after the EIA reported a 1.4-million-barrel decline in oil inventories. Stocks were mixed on the day following a batch of disappointing first quarter earnings released from the tech sector.
Thursday 5/9
The cost of natural gas advanced 11.4 cents to $2.301 after the EIA reported a 79 Bcf injection to storage, which narrowed the surplus compared to the 5-year average to 640 Bcf. Crude oil added 27 cents to end the day at $79.26 on stronger demand expectations after April crude imports to China rose 5.45% from the previous year. Equities jumped higher as investors held on to the possibility of an interest rate cut this year after weekly initial jobless claims climbed to their highest level since August.
Friday 5/10
Natural gas declined 4.5 cents to $2.252 on reports labor and construction issues at the Golden Pass LNG export facility (2 Bcf/d) could push the operational start date to the second half of 2025. Crude oil fell $1.00 to close at $78.26 on reports Chinese refiners were expected to lower imports of oil by 5.8 million barrels in June. Equity markets landed in the green even after Fed Governor Michelle Bowman said it was possible interest rates may need to move higher to control inflation.
Looking Ahead
Energy prices could begin to see upside momentum build if cooling demand increases along side strong LNG exports.
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Jonathan Lee joined ENGIE Impact in 2009 and has produced the Energy Market Watch newsletter for 15 years. He manages the Energy & Sustainability Analytics Intelligence team, focusing on market intelligence and rate forecasting. Jonathan also has a background in Finance and Marketing.
Rick Margolin manages client projects towards the development of voluntary and compliance sustainability programs, evaluation of project opportunities, adoption, implementation and compliance. He also leads tracking of regulatory, legislative and policy environments for impacts on renewables and decarbonization markets.
Jonathan Lee
Manager, Energy & Sustainability Analytics Intelligence
Rick Margolin
Director, Renewables Advisory
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