Your Daily Energy Report for August 22, 2024
Posted on 2024-08-22
Crude Oil
Crude Oil futures for October settled up $1.08 or 1.501% at $73.01. Oil prices increased on Thursday due to expectations of a forthcoming U.S. interest rate cut, which followed four consecutive days of declines. Federal Reserve minutes from their July meeting, released on Wednesday, indicated that a majority of officials anticipated an interest rate reduction in the coming month. Meanwhile, the U.S. Labor Department reported a slight rise in jobless claims last week, suggesting stabilization around a level indicative of a gradual labor market slowdown, paving the way for potential interest rate cuts. Additionally, a U.S. government report revealed larger-than-anticipated declines in crude, gasoline, and distillate inventories last week, signaling an uptick in demand. In the Middle East, Houthi militants, aligned with Iran, continued attacks on international shipping in support of Palestinians amid the conflict involving Israel and Hamas.
Natural Gas
Natural Gas futures for September settled down -$.124 or -5.696% at $2.053. Natural gas prices experienced a significant decline on Thursday following the release of data from the EIA, which showed a storage increase larger than anticipated. During the week ending August 16, U.S. utilities injected 35 billion cubic feet of natural gas into storage, exceeding market expectations of a 27 billion cubic feet rise. This development resulted in storage levels climbing to 12.6% above the five-year average, indicating an ongoing surplus in supply. Consequently, major producers such as EQT and Coterra Energy are scaling back production and postponing projects to manage the excess supply more effectively. Looking forward, analysts predict that this surplus will contribute to lower consumer prices for natural gas this winter, driven by strategic efforts to build up reserves.