Energy Futures Overperform

Conventional energy commodities saw an upward trend as shifts in fundamentals and geopolitical dynamics reshaped market perspectives.

Crude Oil

Shale drilling momentum slows, WTI reaches 2-month high

  • WTI crude oil futures climbed to settle at $64.60 per barrel on Friday, marking their first weekly gain in three weeks with a rise of over 6.5%. The rebound was fueled by renewed optimism after trade talks between US-China, raising hopes for stronger global demand
  • EIA’s report for the week to 30 May shows refinery runs rising 670 kb/d while commercial crude inventories fell 4.3 mb—leaving stocks 7 % below their five-year average and underscoring a tight domestic balance
  • At its 1 June meeting, OPEC+ approved only another 411 kb/d step-up for July, a compromise that keeps most voluntary cuts in place and signalled continued supply discipline despite Saudi pressure for larger hikes
  • Shale activity cools further, as Baker Hughes counted 559 active U.S. rigs on 6 June (-4 w/w; -37 y/y), the lowest since November 2021—hinting at limited upside for near-term Lower-48 output growth
Gasoline

Storage saw strong buildup, futures fluctuate

  • US gasoline futures rose to $2.07 per gallon as the summer driving season gained momentum, with strong travel demand outweighing oversupply concerns
  • After a 2.4 mb draw left U.S. gasoline inventories at 223 mb (≈3 % below the 5-yr norm) for the week ending 23 May, a swift 5.2 mb rebuild to 228 mb the following week tempered upside, underscoring a still finely balanced market
  • One-week deliveries surged to 9.5 mb/d ahead of Memorial Day, yet the four-week average through 30 May was only 8.8 mb/d—3 % lower y/y—keeping the overall call on RBOB subdued
  • Trans-Atlantic arrivals remained robust, with total gasoline imports averaging 0.78–0.79 mb/d over the two-week span, roughly two-thirds destined for the East Coast, easing the region’s supply pinch
  • Refiners lifted crude runs by 670 kb/d to 17.0 mb/d (93.4 % utilisation) by end-May, but finished-gasoline output dipped as plants favoured distillate yields, capping incremental RBOB supply
Natural Gas

Inventory increases surpass seasonal averages

  • US natural gas futures rose to above $3.75/MMBtu, heading for an 8% weekly gain, driven mainly by lower production
  • Dry output dipped to 105.8 Bcf/d in the Jun-4 EIA gas week, and Baker Hughes tallied only 114 active gas rigs on 6 Jun, the leanest early-summer fleet since 2021
  • Sequential injections of 101 Bcf (week to May 23) and 122 Bcf (to May 30) pushed inventories to 2.60 Tcf—now 5 % above the five-year average—muting upward price pressure
  • Warmer weather lifted power-sector burn to 34.6 Bcf/d (+10 % w/w) while residential/commercial use fell 23 %, leaving total U.S. consumption essentially flat
  • Gulf-coast maintenance cut pipeline deliveries to export plants to 14.4 Bcf/d (-7 % w/w); yet 25 cargoes still sailed, pointing to a brief export lull

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