Your Daily Energy Report for September 19, 2024
Posted on 2024-09-19
Crude Oil
Crude Oil futures for October settled up $1.04 or 1.467% at $71.95. Oil prices surged on Thursday following a significant reduction in U.S. interest rates by the Federal Reserve. This move helped global benchmark Brent crude rebound from its recent three-year low. The Fed's decision to cut rates by 0.5% is traditionally seen as stimulating economic activity and fuel demand, though concerns arose about its implications for a weakening U.S. job market and potential economic slowdown. Additionally, escalating tensions in the Middle East contributed to the price increase, as reports indicated explosive incidents involving communication devices linked to Hezbollah and alleged involvement of the Israeli spy agency Mossad. Furthermore, U.S. crude inventories, which are crucial given its status as the world's leading producer, declined to their lowest point in a year, as per Wednesday's government data release.
Natural Gas
Natural Gas futures for October settled up $.064 or 2.802% at $2.348. Natural gas prices climbed following a smaller-than-expected 58 billion cubic feet addition to storage, further narrowing the surplus. Although the storage increase exceeded forecasts, its impact on market sentiment remains uncertain. Current inventories are 194 billion cubic feet higher compared to last year and 274 billion cubic feet above the five-year average. NatGasWeather forecasts continued low demand in the near future, as regions in the western and northern U.S. are enjoying mild temperatures ranging from the 60s to 80s. The EIA reported that the new Matterhorn pipeline, expected to begin service later this month, should provide a 2.5 Bcf/d capacity to the Waha region.