U.S. crude oil and natural gas output set records in December, and oil demand touched multi-month highs, the U.S. Energy Information Administration said in its Petroleum Supply Monthly report.
Crude oil output hit 13.491 million barrels per day (bpd) in December, up from 13.314 million bpd in November and topping the prior all-time high of 13.436 million in October, the EIA said.
Oil output from the Federal Offshore Gulf of Mexico region rose 12.3% in December to 1.86 million bpd, the highest since October 2023, the EIA said. Producers in the region were forced to shut-in more than a quarter of oil production due to Hurricane Rafael in November.
Oil output in Texas, the largest producer in the country, fell 1.3% from November to 5.72 million bpd in December, the lowest since July, while New Mexico output rose to a record-high 2.11 million bpd, EIA data showed.
Gross natural gas production in the U.S. Lower 48 states rose by 2.0% in December to a record 118.5 billion cubic feet per day (bcfd), according to the agency’s 914 production report.
The prior record for gross natural gas production was 117.8 bcfd in February 2024.
In top gas-producing states, monthly output in December rose by 0.9% to a record 36.6 bcfd in Texas and 6.7% to 21.3 bcfd in Pennsylvania.
That compares with the prior monthly all-time high of 36.3 bcfd in October 2024 in Texas and the current record high of 21.9 bcfd in December 2021 in Pennsylvania.
Product supplied of crude oil and petroleum, EIA’s way of measuring demand, rose by 198,000 bpd to 20.433 million bpd in December, the most since October 2024, the data showed.
That compares with a monthly oil demand record of 21.666 million bpd, set in August 2005.
Source: Reuters
Fed seen restarting rate cuts in June as still-elevated inflation slows
The Federal Reserve could restart cuts to short-term borrowing rates in June and follow up with another reduction in September, traders bet on Friday, after data showed inflation edged down in January in line with expectations.
The 12-month change in the personal consumption expenditures price index, which the Fed targets at 2%, ticked down to 2.5% last month from 2.6% in December, and the core PCE measure fell to 2.6% from 2.9%, the Commerce Department’s Bureau of Economic Analysis showed.
The same report also showed consumer spending unexpectedly dropped in January, following a sharp increase in December as households stocked up on goods ahead of the Trump administration’s telegraphed tariffs, which have stoked rising fears of a resurgence in price pressures amid a slowdown in business activity.
The combination of still-elevated inflation and cooling economic growth has some analysts worried that Fed policymakers may need to choose between their two goals of price stability and full employment, and could potentially keep rates higher for longer to beat inflation only to see the jobs picture deteriorate.
“The Fed now has a lot of worrying to do,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
Fed policymakers themselves say they are focused on the data to be released over the next couple of months and on assessing the actual economic fallout of Trump’s policies, including a 25% levy on imports from Mexico and Canada set to start next week, along with an increase to tariffs on China. It’s unclear, they say, how much of those higher rates will be passed on to consumers in the form of higher prices, and on how they will impact economic growth more broadly.
None have signaled any inclination to cut the policy rate, currently in the 4.25%-4.50% range, when they meet next month, and at least a few — including Fed Governor Adriana Kugler and Cleveland Fed chief Beth Hammack — say rates could stay where they are for some time unless there is an unexpected increase in the unemployment rate, which last month dropped to 4%.
Fed Chair Jerome Powell is expected to give his own updated view on the economic and policy outlook next Friday, when the government will also release its monthly employment report for February.
Source: Reuters