Your Daily Energy Report for August 20, 2024
Posted on 2024-08-20
Crude Oil
Crude Oil futures for October settled down -$1.20 or -1.614% at $73.17. Oil prices saw a decline on Wednesday, as reports indicated an increase in U.S. crude stockpiles and as expectations grew that Middle Eastern tensions might be easing following recent diplomatic efforts. According to sources referencing data from the American Petroleum Institute, U.S. crude inventories rose by 347,000 barrels last week. In contrast, gasoline and distillate stocks decreased by 1.043 million barrels and 2.247 million barrels, respectively. Official figures from the U.S. government are anticipated to be released later on Wednesday at 10:30 a.m. CT. Additionally, U.S. Secretary of State Antony Blinken concluded his visit to the Middle East, which aimed at facilitating a ceasefire in Gaza. His efforts, along with those of mediators from Egypt and Qatar, have increased optimism about a potential U.S. proposal that might narrow the divides in the ongoing conflict.
Natural Gas
Natural Gas futures for September settled down -$.037 or -1.655% at $2.198. Natural gas prices dipped on Tuesday, reflecting a nearly 30% decrease from the highs observed in June. This price drop is attributed to an oversupply situation despite the summer's robust demand. Milder winter temperatures led to lower heating requirements, resulting in an accumulation of excess stock and further driving prices down. Major companies such as EQT and Coterra Energy are responding by scaling back production and postponing projects to address the surplus. While current storage is 13% higher than the average over the past five years—an improvement from a 40% surplus seen in March—analysts predict that consumer prices will fall this winter due to strategic reserves. In response, producers have reduced the number of active rigs from over 120 in February to 98 last week.