Your Daily Energy Report for July 12, 2024
Posted on 2024-07-12
Crude Oil
Crude Oil futures for August settled down -$.42 or -.508% at $82.21. Oil prices declined on Friday amidst considerations of subdued consumer sentiment and supportive economic data indicating a potential Federal Reserve rate cut in September. According to a recent University of Michigan survey, U.S. consumer sentiment in July hit its lowest point in eight months, despite improved inflation expectations for the coming years. The U.S. Labor Department reported a 0.2% increase in the producer price index (PPI) for June, slightly surpassing expectations, driven by rising service costs. Despite these indicators, market expectations lean towards a Fed rate cut next month. Meanwhile, U.S. gasoline demand reached 9.4 million barrels per day (bpd) in early July, the highest since 2019 during the Independence Day week, offering some support to oil prices. However, concerns over reduced demand from China, the world's largest oil importer, may counterbalance optimism from the U.S., exerting downward pressure on prices.
Natural Gas
Natural Gas futures for August settled up $.061 or 2.69% at $2.329. Natural gas futures saw volatility on Friday as traders considered the impending extreme heat, increasing surpluses, and the aftermath of Beryl's impact in Texas. This highlights the intricate factors affecting gas prices. Early cycle nominations for U.S. LNG export terminals on Friday were pegged at 11.4 Bcf/d. Nonetheless, the Freeport LNG terminal in Texas has been offline for six consecutive days due to power outages following Beryl’s landfall, affecting overall export capacity. Forecasts indicate strong high pressure across much of the U.S. from July 12-18, with temperatures ranging from the 90s to 100s, likely driving significant gas demand, except in the far northern regions where cooler temperatures are expected.