Your Daily Energy Report for July 3, 2024
Posted on 2024-07-03
Crude Oil
Crude Oil futures for August settled up $2.34 or 2.87% at $83.88. On Wednesday, WTI crude oil futures exceeded $83 per barrel, maintaining proximity to the two-month high of $83.4 reached on Monday due to ongoing concerns about supply shortages. According to the latest EIA report, U.S. crude oil inventories fell by 12.2 million barrels in the final week of June, marking the largest decline in a year and far surpassing the anticipated 1 million barrel decrease, consistent with the API's findings. Supply worries were heightened by potential hurricane activity in the Gulf of Mexico, which could disrupt extraction operations for major producers. Additionally, the extended conflict between Israel and Hamas in Gaza has sustained the risk premium on energy futures. However, sentiment was tempered by OPEC's oil output increasing for the second consecutive month in June.
Natural Gas
Natural Gas futures for August settled down -$.183 or -7.036% at $2.418. Natural gas prices experienced a decline today, due to increased production and cooler mid-July weather forecasts, resulting in seven consecutive sessions of losses. Storage levels are now 18.8% above the seasonal average. Despite this surplus, prices remain near a seven-week low, driven by higher production and oversupply. Although a heat wave is expected to continue through mid-July, production in the Lower 48 states has averaged 101.8 bcfd in July, up from 100.2 bcfd in June. Production had reached a 17-month low of 99.5 bcfd in May, but recent higher prices have motivated producers such as EQT and Chesapeake Energy to resume drilling. Additionally, LNG export plant flows have slightly decreased in July compared to June, mainly due to lower feedgas levels at Cheniere Energy's Sabine Pass.