Your Daily Energy Report for August 6, 2024
Posted on 2024-08-06
Crude Oil
Crude Oil futures for September settled up $.26 or .356% at $73.20. On Tuesday, oil prices climbed, recovering from multi-month lows seen the previous day. This rise was driven by investor concerns over supply constraints and a bounce back in financial markets. Tensions in the Middle East, particularly Iran's threats of retaliation against Israel and the U.S. following the deaths of two militant leaders, have sparked fears of a broader conflict that could affect regional oil supplies. Additionally, production at Libya's Sharara oilfield is being reduced due to protests, adding to worries about supply shortages. Decreases in crude and fuel inventories at major trading hubs, along with strong U.S. gasoline demand—likely exceeding 9 million barrels per day last week—have further bolstered oil prices. The EIA reported on Tuesday that global oil inventories fell by around 400,000 barrels per day in the first half of the year and are expected to decline by approximately 800,000 barrels per day in the second half.
Natural Gas
Natural Gas futures for September settled up $.068 or 3.502% at $2.01. Natural gas prices rose on Tuesday, driven by predictions of increased consumption by power generators due to upcoming warmer weather. While Hurricane Debby may bring some cooling to the mid-continent, the overall warmer trend across the U.S. next week is expected to support prices. Export activity has bounced back, but high production levels, around 103 bcfd, might limit significant price rises and lead to larger storage injections. In August, gas production in the Lower 48 states averaged 103.8 bcfd, up from July’s 103.4 bcfd, though still below December’s record of 105.5 bcfd. Meanwhile, shipments of Russian LNG to France more than doubled in the first half of this year, amid Europe's efforts to reduce energy purchases that finance Russia's invasion of Ukraine.