Your Daily Energy Report for August 12, 2024
Posted on 2024-08-12
Crude Oil
Crude Oil futures for September settled up $3.22 or 4.191% at $80.06. Oil prices experienced an uptick on Monday, marking the fifth consecutive day of increases, driven by concerns over escalating tensions in the Middle East that could lead to a decrease in global oil supplies. Over the weekend, the U.S. Defense Department revealed plans to deploy a guided missile submarine to the Middle East in anticipation of potential strikes on Israel by Iran and its allies. Both Iran and Hezbollah have threatened retaliation in response to the killings of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr. Such an attack could further destabilize the Middle East, limiting global crude supplies and driving prices higher. Officials from the U.S. central bank indicated last week that inflation might be slowing sufficiently to allow the Federal Reserve to lower interest rates as early as next month. Lower interest rates stimulate economic activity, which in turn boosts the demand for energy, including oil.
Natural Gas
Natural Gas prices for September settled up $.046 or 2.147% at $2.189. Natural gas prices have climbed for five sessions in a row, marking the longest stretch of gains since January due to decreased production and a narrowing inventory excess. The arrival of Hurricane Debby in Florida added complexity to the market. The storm lowered cooling demand by introducing cooler weather, a typically bearish influence, but this was countered by supply chain disruptions and power outages. Cooler weather predictions for northern regions are also likely to keep demand down, especially in the Southeast. Ukraine's recent actions in Russia’s Kursk region have put a significant gas transit point at risk. While Europe is broadening its energy portfolio, several nations, including Austria and Slovakia, remain reliant on Russian gas passing through Ukraine.