Your Daily Energy Report for August 7, 2024
Posted on 2024-08-07
Crude Oil
Crude Oil futures for September settled up $2.03 or 2.773% at $75.23. Oil prices rose more than 2% on Wednesday, rebounding from recent lows due to an unexpected decline in U.S. crude stockpiles. The drop of 3.7 million barrels to 429.3 million barrels last week significantly surpassed analysts' forecasts of a 700,000-barrel decrease. This rise occurred despite ongoing concerns about weak oil demand in China, where July daily crude imports fell to their lowest level since September 2022. Additional factors contributing to supply worries include reduced output at Libya's 300,000 barrel-per-day Sharara oilfield. Libya's National Oil Corporation declared force majeure at this field on August 7 because of protests. Moreover, attacks by Iran-aligned Houthi militants on a container ship in the Red Sea and two U.S. destroyers in the Gulf of Aden have forced tankers to use longer, alternate routes, complicating supply lines.
Natural Gas
Natural Gas futures for September settled up $.102 or 5.075% at $2.112. Natural gas prices continue to recover amid a broad upswing in the energy markets. Although current demand for natural gas is moderate, it is projected to increase soon due to anticipated hot weather. Major U.S. natural gas producers are planning further production cuts in the latter half of 2024, following a nearly 40% price drop over the past two months. Chesapeake Energy, set to become the largest U.S. gas producer after merging with Southwestern Energy, intends to delay some well completions until the market stabilizes, as mentioned in their second-quarter earnings report. On the other hand, Coterra Energy, a shale producer, had reversed some production cuts at the end of the second quarter but is preparing for additional reductions.