Your Daily Energy Report for July 31, 2024
Posted on 2024-07-31
Crude Oil
Crude Oil futures for September settled up $3.18 or 4.255% at $77.91. On Wednesday, oil prices surged by almost 3% as investors grew concerned about the potential for broader conflict in the Middle East following the death of a Hamas leader in Iran. This increase was further driven by a significant drop in U.S. crude oil inventories, which fell by 3.4 million barrels last week according to government data, much higher than the 1.1 million-barrel decline forecasted by analysts in a Reuters survey. This marked the fifth consecutive week of stockpile reductions, the longest streak since January 2021. The previous day, Brent and WTI both decreased by around 1.4%, hitting their lowest points in seven weeks due to hopes that a ceasefire in Gaza might reduce regional tensions and associated supply concerns. Overnight, tensions escalated in the oil-producing region with the news of the assassination of Hamas leader Ismail Haniyeh in Iran.
Natural Gas
Gas futures for September settled down -$.09 or -4.233% at $2.036. U.S. natural gas futures dipped below $2.05 per MMBtu, scaling back the week's gains as updated weather forecasts reduced concerns about extreme heat and the resulting increased demand for air conditioning. Anticipation of unprecedented heat across the Lower 48 states in August had previously caused a significant rebound in natural gas futures from a three-month low of $1.9 last week. However, adjustments in the heatwave's intensity have moderated those concerns. Nevertheless, potential reductions in gas supply continued to offer some support in the global market. This situation arose alongside reports that Freeport LNG, the second-largest U.S. export terminal, is drawing over 2 billion cubic feet of gas daily and is on track to resume full production.