Your Daily Energy Report for June 26, 2024
Posted on 2024-06-26
Crude Oil
Crude Oil futures for August settled up $.07 or .087% at $80.90. Oil prices ended Wednesday slightly higher, despite an unexpected increase in U.S. gasoline inventories, as investors remained concerned about potential disruptions to crude supplies from the Middle East due to escalating tensions in Gaza. The rising conflict between Israel and Hezbollah in Lebanon has heightened fears of a broader regional conflict that could involve major oil producer Iran. Earlier in the day, oil prices dipped after the EIA reported a surprising 3.6 million barrel increase in U.S. crude oil stocks for the previous week, contrary to analysts' expectations of a decrease. U.S. gasoline consumption, which accounts for about 10% of global oil demand, was down 3.6% from the same period last year, averaging around 8.9 million barrels per day last week. Despite reduced output from refiners, gasoline stocks rose unexpectedly.
Natural Gas
Gas futures for August settled down -$.118 or -4.122% at $2.745. Natural gas futures fell on Wednesday due to increased supply concerns and market adjustments before the upcoming month’s expiration. Even with forecasts predicting high demand from widespread heat across the U.S., the expected rally in futures did not occur. In Texas, the unusual negative pricing is due to an oversupply situation worsened by Kinder Morgan's maintenance on the Permian Highway gas pipeline. Additionally, Gazprom announced a memorandum with the National Iranian Gas Company to supply Russian pipeline gas to Iran. Gazprom, meanwhile, having lost most of the European market, is looking to pivot its sales to Russia’s “friendly” countries, which include China and Iran.