Your Daily Energy Report for July 23, 2024
Posted on 2024-07-23
Crude Oil
Crude Oil futures for September settled down -$1.44 or -1.837% at $76.96. Oil prices dropped to their lowest point in six weeks on Tuesday. This decline was driven by increasing hopes for a ceasefire in Gaza and concerns over demand in China. U.S. diesel futures settled at their lowest level since June 7, while gasoline futures closed at their lowest since June 14. Efforts to negotiate a ceasefire between Israel and Hamas in the Middle East, supported by a plan outlined by U.S. President Joe Biden and mediated by Egypt and Qatar, have gained traction over the past month. Meanwhile, expectations of interest rate cuts in September may stabilize oil prices, as lower borrowing costs typically stimulate oil demand. China's unexpected decision to reduce both short and long-term interest rates on Monday, its first such broad action since last August, reflects its efforts to bolster growth.
Natural Gas
Natural Gas futures for August settled down -$.064 or -2.843% at $2.187. Natural gas prices decreased on Tuesday, influenced by increased production and an abundance of storage. Currently, storage levels are about 17% higher than usual, despite smaller injections in recent weeks following earlier output cuts when prices reached their lowest in three and a half years. However, rising prices in April and May prompted companies like EQT and Chesapeake Energy to boost production in June and July. The price decline was somewhat mitigated by increased exports from U.S. LNG facilities, including Freeport LNG in Texas. Additionally, predictions of extreme heat in August are expected to increase gas consumption for electricity generation to power air conditioners. Moreover, reduced wind power output has led to greater reliance on gas-fired power plants, which supplied 48% of electricity this week, up from 46% last week and 41% last year.