Written on: June 3, 2024

Energy Price Report

Monday, June 3, 2024

Energy markets are trading flat to lower as of this writing on Monday morning despite gains in European shares, flat-to-higher trade in US stock market index futures, weakness in the US dollar index, and news that OPEC+ has decided to extend its output cuts into 2025.

Market traders are looking ahead to US manufacturing and construction spending data for further direction.

OPEC Plus Met Over the Weekend

OPEC+ met over the weekend and agreed to extend 3.66 million barrels per day of its oil output cuts into 2025, which were due to expire at the end of the year.  In addition, the 2.2 million barrel per day of voluntary cuts by eight members will be prolonged by three months until the end of September 2024 and then phased out over the following 12 months.

Reuters reported that Russia said that it has no doubt that it will reach an agreement with China to build the new Power of Siberia 2 gas pipeline, after the Financial Times reported that the deal was stalled over Chinese price demands.

Asian Markets

Asian shares closed mixed overnight as the Shanghai Composite fell 0.27%, whereas the Nikkei added 1.13% and the Hang Seng jumped 1.79% higher.  The S&P Global China Manufacturing PMI for May came in at 51.7, just above forecasts at 51.5.  The final May Jibun Bank Manufacturing PMI for Japan came in at 50.4, down from 50.5 in April.  The Nikkei/S&P Global India Manufacturing PMI for May fell from 58.8, past the 58.4 consensus to 57.5, indicating expansion in the sector slowed.

European Markets

The final S&P Global Manufacturing PMI for the Eurozone for May came in at 47.3, just below expectations calling for no revision from the flash estimate of 47.4.  The index for Germany matched forecasts by coming in at 45.4, while the index for France missed expectations with a 46.4 print.  In the UK, the final CIPS/S&P Global Manufacturing PMI just missed forecasts by coming in at 51.2 (vs 51.3).  Despite neutral to unsupportive economic news, European shares were trading higher as of this writing.  The FTSE 100 edged up 0.2%, the CAC 40 had added 0.4%, and the DAX was up 0.8%.

US Stock Market Futures

US stock market index futures were trading flat to higher with futures for the Dow holding steady, while S&P 500 futures were up 0.2% and Nasdaq futures had gained 0.6%. Also supportive for crude oil prices, the US dollar index was down 0.1% this morning.

Energy Futures

Crude futures weakened on Friday despite flat to higher trade in European equities and weakness in the US dollar.  Brent crude fell 24 cents to $81.62 a barrel and WTI crude lost 92 cents to close at $76.99 a barrel.  Refined product futures closed mixed as gasoline futures gained 2.14 cents to settle at $2.4260 per gallon, heating oil futures edged down 58 points to $2.3636 per gallon, propane prices fell along with crude futures on Friday as Mt. Belvieu TET fell 1.19 cents to 70.81c/g and natural gas futures rose 1.5 cents to settle at $2.587 per MMBTU.