WTI crude oil futures rose more than 1% to around $58.1 per barrel on Tuesday, as dip-buyers stepped in after a sharp sell-off in the previous session due to concerns over excess supply. Renewed tensions in the Middle East also supported prices after Israel carried out air strikes on Yemen's Hodeidah port and a cement factory in response to the Iranian backed Houthis’ missile attack that hit Israel’s main airport a day earlier. On Monday, WTI crude dropped 2%, hitting its lowest level in over four years, following OPEC+ decision to accelerate its output hikes for a second straight month. The group will raise output by 411,000 bpd in June, speeding up the gradual return of 2.2 million bpd in voluntary production cuts. Saudi Arabia, the group’s de facto leader, also warned of further production increases if the overproducing members don’t fall in line. The supply increase has added to concerns that the ongoing trade tensions will slow economic growth and reduce energy demand.
US natural gas futures rose toward a four-week high of $3.7/MMBtu, extending a 16.6% gain in the previous week, driven by a drop in output and record LNG exports. Production has fallen by 2.8 bcfd over the past five days to a two-month low of 102.6 bcfd on Friday. Also, LNG exports hit a record average of 16.0 bcfd in April, driven by increased flows to the under-construction Plaquemines facility. Looking ahead, meteorologists projected temperatures in the Lower 48 states would remain mostly warmer than normal through May 17. Analysts suggest continued mild weather and high output could lead to record injections in May. Meanwhile, EIA data showed a larger-than-usual storage build of 107 bcf for the week ended April 25, due to mild weather reducing demand. That surpasses both last year’s 64 bcf increase and the five-year average of 58 bcf. Storage levels are now near seasonal norms.
