Your Daily Energy Report for September 20, 2024
Posted on 2024-09-20
Crude Oil
Crude Oil futures for October settled down -$.03 or -.042% at $71.92. Oil prices maintained stability on Friday and appeared poised to record a second consecutive week of increases, supported by significant cuts in U.S. interest rates and a decrease in U.S. oil inventories. The market is still adapting following the U.S. central bank's decision to reduce interest rates by half a percentage point. Such cuts typically stimulate economic activity and energy consumption, although concerns linger among analysts regarding vulnerabilities in the U.S. job market. Additionally, escalating tensions in the Middle East have heightened the potential for disruptions to oil supplies, further bolstering market sentiment. Meanwhile, in China, refinery production slowed for the fifth consecutive month in August, and industrial output growth reached a five-month low. This weakness underscores subdued consumer and industrial demand, particularly in light of slowing economic expansion and increased adoption of electric vehicles.
Natural Gas
Gas futures for October settled up $.086 or 3.663% at $2.434. Natural gas prices have climbed in anticipation of the October expiration next week, shifting attention from the typically low-demand period to preparations for the upcoming winter heating season. According to the latest EIA report, U.S. utilities injected 58 billion cubic feet of gas into storage for the week ending September 13, exceeding market projections of a 53 bcf increase. Current storage levels stand 8.6% higher than the five-year average, indicating an abundance of supply. Despite expectations of cooler weather potentially reducing cooling demand, the weather patterns across the U.S. have been unpredictable, with lingering strong summer demand. The National Hurricane Center is tracking a few tropical storms that could affect production and demand along the Gulf Coast.