Your Daily Energy Report for August 5, 2024
Posted on 2024-08-05
Crude Oil
Crude Oil futures for September settled down -$.58 or -.789% at $72.94. Oil prices declined on a volatile Monday as a global stock market selloff continued. However, the drop was moderated by concerns that Iran's response to the assassination of a Hamas leader in Tehran could escalate into a larger conflict in the Middle East. Stock markets fell from Asia to North America as investors moved away from riskier assets, anticipating that the Federal Reserve may need to implement rapid interest rate cuts to stimulate U.S. economic growth. Concerns about potential supply disruptions from a broader Middle East conflict limited the losses in oil prices throughout the day. Israel and the U.S. are preparing for significant escalation in the region following vows of retaliation from Iran and its allies, Hamas and Hezbollah, for the killings of Hamas leader Ismail Haniyeh and a top Hezbollah military commander last week. Oil traders are expecting Iran's response to be brief, making crude futures more susceptible to fears of a U.S. recession.
Natural Gas
Natural Gas futures for September settled down -$.025 or -1.271% at $1.942. Natural gas prices dropped on Monday due to increased production, excessive storage levels, and concerns over a storm near Florida. Currently, gas storage levels are approximately 16% higher than usual for this time of year, although recent increases have slowed compared to earlier in the year when production cuts were implemented after prices hit their lowest in over three years. Hurricane Debby has made landfall in Florida, potentially impacting market dynamics. On the demand side, increased gas shipments to LNG export facilities and forecasts of near-record heat are expected to boost gas consumption for electricity generation. The broader decline in natural gas prices is also part of a global market downturn driven by concerns about a potential slowdown in the US economy.