Your Daily Energy Report for August 23, 2024
Posted on 2024-08-23
Crude Oil
Crude Oil futures for October settled up $1.82 or 2.493% at $74.83. Oil prices saw an uptick following remarks from the Chair of the U.S. Federal Reserve, who signaled a forthcoming emphasis on interest rate cuts. The Chair's endorsement of easing Fed policies underscored concerns about the job market's trajectory, while also expressing optimism about inflation nearing the central bank's 2% target. In anticipation of the Chair's speech, the U.S. dollar index softened to around 101.45, a movement that traditionally boosts demand for dollar-denominated commodities like oil among investors using alternative currencies. Moreover, recent economic indicators from China, a principal importer of oil, pointed to economic struggles and diminished demand from its refining sector. These factors added pressure to global oil markets. Additionally, renewed diplomatic efforts to broker a ceasefire between Israel and Hamas in Gaza contributed to easing concerns about oil supply disruptions, further influencing oil prices.
Natural Gas
Natural Gas futures for September settled down -$.031 or -1.51% at $2.022. On Thursday, natural gas prices declined due to a larger-than-expected injection that countered recent efforts to tighten supply. The market responded negatively to a storage report indicating higher-than-anticipated levels and subdued seasonal demand, causing futures to drop below crucial support thresholds. According to the EIA, the amount of natural gas held in storage stands at 3,299 Bcf, significantly surpassing levels from the previous year by 221 Bcf and exceeding the five-year average of 2,930 Bcf. This surplus has raised concerns about oversupply heading into the winter heating season, exerting further downward pressure on prices. Despite forecasts predicting heightened demand due to hot weather, prices continue to be weighed down by mild conditions in northern regions.