Your Daily Energy Report for July 11, 2024
Posted on 2024-07-11
Crude Oil
Crude Oil futures for August settled up $.53 or .646% at $82.63. Oil prices increased for the second day in a row on Thursday. This rise was fueled by growing expectations of U.S. interest rate cuts following data that showed a surprising drop in inflation. U.S. consumer prices declined in June, leading to increased hopes that the Federal Reserve will lower rates soon. After the release of this data, traders estimated an 89% chance of a rate cut in September, up from 73% the previous day. Fed Chair Jerome Powell noted the recent positive trend in price pressures but indicated that more data is needed to justify rate cuts. Despite this, some analysts remain cautious about the oil demand outlook. The IEA projecteda slowdown in global demand growth to below one million barrels per day this year and next, primarily due to reduced consumption in China. OPEC maintained its forecast for global demand growth at 2.25 million bpd for this year and 1.85 million bpd for next year in its monthly report on Wednesday.
Natural Gas
Natural Gas futures for August settled down -$.061 or -2.619% at $2.268. US natural gas futures fell on Thursday, hitting their lowest point in two months. This drop was triggered by a larger-than-expected increase in gas storage reported by the EIA. Last week, utilities added 65 billion cubic feet of gas to storage, exceeding the anticipated 56 billion cubic feet. Currently, gas in storage is 18.7% higher than seasonal norms. Prices are set for their fifth consecutive week of decline, driven by increased production, reduced gas flow to LNG export facilities following the shutdown of Freeport LNG in Texas due to Hurricane Beryl, and an oversupply of gas in storage. Gas production in the lower 48 US states has climbed to 102.4 billion cubic feet per day in July, up from a low of 99.5 billion cubic feet per day in May.