Written on: January 3, 2022

Energy Price Report

Monday, January 3, 2022

Energy futures are trading flat to lower on Monday despite gains in US stock market index futures and in European shares, as well as weakness in the US dollar index.  Market participants are looking ahead to the final US Markit Manufacturing PMI and construction spending figures for further direction.

Energy Production

Libyan National Oil Corporation stated that the country’s output will be cut by 0.2mb/d for a week due to maintenance on a main pipeline between the Samah and Dahra fields.  Also in the news, Reuters reported that OPEC+ is likely to stick to its existing plan of 0.4mb/d output increases at tomorrow’s meeting, after the Joint Technical Committee said that the impact of the Omicron variant is expected to be mild and short-lived.

Overseas Markets

The Hang Seng closed 0.53% lower overnight, while the Tokyo Stock Exchange and the Shanghai Stock Exchange were closed for a holiday. The Markit Manufacturing PMI in India fell from 57.6 to 55.5 in December, indicating the country’s economic expansion slowed. In European news, the final Markit Eurozone Manufacturing PMI came in at 58.0, matching expectations. The index for Germany missed forecasts by coming in at 57.4 (vs 57.9), while the index for France came in at 55.6, above the Econoday consensus at 54.9. As of this writing, the DAX was up 1.07% and the CAC 40 had added 1.21%. The London Stock Exchange is closed. US stock market index futures were also seeing gains this morning of between 0.4% (Dow f) and 0.7% (Nasdaq f). Also supportive for crude oil prices, the US dollar index was down 0.15%.

Energy Futures Lower on Friday

Energy futures lost ground on Friday after a seven-session rally. Brent crude fell $1.75 to $77.78 a barrel, WTI crude lost $1.78 to settle at $75.21, gasoline futures dropped 6.83 cents lower to settle at $2.2285 per gallon, heating oil settled 6.58 cents lower at $2.3301 and natural gas futures rose 16.9 cents to settle at $3.730 per MMBTU.

Colder Temperatures on the Way

The latest 1-5 day forecast (EC) calls for below-normal temperatures across the majority of the country, save for some parts of New England. The 6-10 day forecast is also supportive with below-normal temperatures seen across the eastern half of the country.