Your Daily Energy Report for August 16, 2024
Posted on 2024-08-16
Crude Oil
Crude Oil futures for September settled down -$1.51 or -1.932% at $76.65. Crude oil prices dropped on Friday, after Qatar's call for Iran to ease tensions with Israel amid the ongoing cease-fire discussions in Gaza. Additionally, the decrease in oil prices is attributed to broader concerns about diminishing demand from China, the leading global oil importer. Recent economic data from China highlighted slowing growth, declining home prices, and increasing unemployment, which led to a cut in crude processing rates by Chinese refineries. Both OPEC and the IEA have revised their oil demand growth projections downward due to China's economic slowdown. Earlier in the week, oil prices had risen on concerns over potential Iranian retaliation against Israel, but these fears have since diminished. The market's volatility was also exacerbated by low liquidity, partly due to investor holiday.
Natural Gas
Natural Gas futures for September settled down -$.074 or -3.368% at $2.123. Natural gas prices dropped on Friday, driven by predictions of cooler weather and ample gas storage, even though there was an unexpected draw in inventories. The U.S. Energy Information Administration (EIA) reported a 6 billion cubic feet (bcf) reduction in inventories for the week ending August 9, bringing total stocks down to 3.264 trillion cubic feet (tcf). Despite this draw, storage levels are still 7.2% higher than last year and 12.5% above the five-year average. Elevated production levels and lower demand due to LNG maintenance have kept storage levels high. The market remains weak, reflecting concerns about an oversupply despite the EIA's atypical early August draw.