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Crude oil futures closed the week and the month with gains as expectations rose for summer demand to continue the rally.
Oil had tumbled to multi-month lows early in June when OPEC+ said it would start unwinding production cuts after September, then rallied on forecasts of tighter balances ahead and on higher perceived geopolitical risk.
“Despite negative crude oil inventory results and a strong U.S. dollar index, bullish demand anticipations remain strong on crude oil charts,” Forex.com analyst Razan Hilal told Dow Jones. “The anticipation of easing monetary policies, coupled with an expected increase in oil demand during the summer season, is dominating the trend.”
Front-month Nymex crude (CL1:COM) for August delivery finished the week +1% and the month +5.9% at $81.54/bbl, while front-month August Brent (CO1:COM) ended this week +1.3% and this month +5.8% at $86.41/bbl; on Friday, WTI closed down 0.2% and Brent finished flat.
For the quarter, WTI fell 1.9% and Brent dropped 1.2%.
Front-month Nymex natural gas (NG1:COM) for August delivery ended the week -8.3% but was +0.5% on the month to $2.601/MMBtu.
But for Q2, natural gas surged 47.5%, its best quarterly percentage gain since Q1 2022.
ETFs: (USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)
U.S. natural gas production is “ample” with plenty of gas in storage, but there are also forecasts for a more active Atlantic hurricane season, Quantum Gas & Power Services President Beth Sewell told MarketWatch this week.
The National Oceanic and Atmospheric Administration has predicted above-normal hurricane activity in the Atlantic basin this year, with an 85% chance of an above-normal season and 17-25 total named storms, including 8-13 likely to become hurricanes.
Meanwhile, a “good portion of the U.S. continues to have above-average temperatures for this time of year, which drives cooling demand and power generation to support it,” Sewell said.
The energy sector, represented by the Energy Select Sector SPDR Fund (NYSEARCA:XLE), posted a strong week, +8.7%.
Top 10 gainers in energy and natural resources in the past 5 days: Nano Nuclear Energy (NNE) +49%, Lightbridge (LTBR) +39.8%, Enovix (ENVX) +28.8%, Skeena Resources (SKE) +18.5%, Nuscale Power (SMR) +16.6%, Eco Wave Power (WAVE) +16.3%, Knot Offshore Partners (KNOP) +16.1%, Adams Resources & Energy (AE) +15.1%, Foremost Lithium Resources (FMST) +13.6%, Scully Royalty (SRL) +13%.
Top 5 decliners in energy and natural resources in the past 5 days: Centuri Holdings (CTRI) -23.8%, Perpetua Resources (PPTA) -20.8%, TPI Composites (TPIC) -13.1%, Ballard Power (BLDP) -12.8%, Compass Minerals (CMP) -11.5%.
Source: Barchart.com
