WTI crude oil futures declined toward $68 per barrel on Friday, heading for a weekly loss after three consecutive weeks of gain driven by concerns that the global oil market could shift into oversupply. On Thursday, the International Energy Agency projected an oil surplus for next year, citing slowing demand growth in China and increased global production. The agency also highlighted that the surplus might be exacerbated if OPEC+ proceeds with plans to restore previously curtailed production. Further weighing on prices is the stronger US dollar, which surged to a 2-year high, reducing the appeal of dollar-priced commodities. Additionally, data from the US Energy Information Administration (EIA) showed that US crude inventories rose by 2.1 million barrels last week, exceeding expectations of a 1.9 million-barrel rise. However, there was a sharp 4.4-million-barrel decline in gasoline stockpiles, bringing them to their lowest level in a decade for this time of year.
US natural gas futures fell toward $2.7/MMBtu after the EIA's storage build report showed supply remains robust. While US utilities added 42 billion cubic feet of natural gas into storage last week, slightly below the expected 43 bcf build, gas in storage is now 6.1% above the seasonal norm. This marks the fourth consecutive week of above-average storage builds, a trend not observed since October 2022. While heating demand is expected to increase later in November as colder weather sets in, forecasts indicate warmer-than-usual conditions through November 20, with temperatures nearing average from November 21-27. Production has also dropped, with average output in the Lower 48 states at 100.0 bcfd so far in November, down from 101.3 bcfd in October. The recent decline, which saw production hit a nine-month low of 98.3 bcfd on Tuesday, was partly due to disruptions from Hurricane Rafael impacting the Gulf of Mexico.
