Your Daily Energy Report for August 21, 2024
Posted on 2024-08-21
Crude Oil
Crude Oil futures for October settled down -$1.24 or -1.695% at $71.93. Oil prices dropped on Wednesday following a significant downward revision of employment figures by the U.S. government. The Labor Department reported that U.S. employers added considerably fewer jobs than initially estimated for the year ending in March, with the total payroll count for April 2023 to March 2024 being adjusted down by 818,000. In light of this, Federal Reserve officials were notably inclined toward cutting interest rates during their September meeting, with some even favoring an immediate reduction, as indicated in the minutes from the July 30-31 meeting. Elevated interest rates tend to raise borrowing costs, which can slow economic growth and reduce oil demand. Additionally, a Greek-flagged oil tanker was stranded in the Red Sea on Wednesday due to a fire caused by repeated attacks, which led to a loss of power, according to the UK maritime agency.
Natural Gas
Natural Gas futures for September settled down -$.021 or -.955% at $2.177. Natural gas prices are trending downward on Wednesday as the market awaits the latest weekly storage data. Weather conditions continue to be a significant factor in market fluctuations. NatGasWeather forecasts moderate national demand until Friday, with anticipated increased demand over the weekend due to above-average temperatures in much of the U.S. The market is dealing with ongoing oversupply, prompting major producers such as EQT and Coterra Energy to reduce their output. These companies are postponing new drilling operations and well connections to pipelines because of persistently low prices during peak summer demand. The expected rise in LNG export capacity from terminals like Plaquemines and Corpus Christi is likely to enhance demand and potentially lead to a tighter market.