Your Daily Energy Report for September 17, 2024
Posted on 2024-09-17
Crude Oil
Crude Oil futures for October settled up $1.10 or 1.569% at $71.19. Oil prices increased on Tuesday, amid ongoing supply issues and market speculation that demand might rise if the U.S. Federal Reserve reduces borrowing costs this week, as many anticipate. Supply disruptions in the U.S. Gulf of Mexico, where Hurricane Francine impacted more than 12% of crude production, have pushed oil prices up in four of the last five sessions. Additionally, oil prices received a boost from disruptions in Libya, where a dispute between rival factions over central bank control has led to decreased oil production and exports. Efforts by the United Nations to resolve the situation have not yet yielded a solution. Meanwhile, the Biden administration is looking to acquire up to 6 million barrels for the Strategic Petroleum Reserve, a move that, if completed, would match the largest purchase made in the reserve's history following a significant sale in 2022.
Natural Gas
Natural Gas futures for October settled down -$.049 or -2.065% at $2.324. Natural gas prices have retreated after reaching a new two-month high, with moderate weather-related demand expected to limit further increases. Citi Research has revised its Henry Hub price forecast for the fourth quarter down to $2.60 from $3.30, although it remains optimistic for 2025 due to anticipated growth in LNG exports and reduced imports from Canada. They believe U.S. production may not meet market expectations, even with the upcoming launch of the Matterhorn pipeline, which will transport gas from the Permian Basin. Their base scenario anticipates that producers may begin to address their well backlog starting in January, but this could be delayed until the second quarter if higher prices are anticipated.