Your Daily Energy Report for August 1, 2024
Posted on 2024-08-01
Crude Oil
Crude Oil futures for September settled down -$1.60 or -2.054% at $76.31. On Thursday, oil prices declined as global supply remained largely stable despite fears of an expanded Middle East crisis following the death of a Hamas leader in Iran. Investors shifted their focus back to demand concerns. The previous session saw a nearly 4% increase in the most active contracts for both benchmarks due to fears of a broader conflict sparked by the assassination of Hamas leader Ismail Haniyeh in Tehran, shortly after Hezbollah's top military commander was killed in Beirut. Analysts noted that investors were monitoring potential disruptions, especially to oil shipping routes. Iran-aligned Houthi militants have attacked vessels in the Red Sea, forcing tankers to take longer alternative routes. Meanwhile, a meeting of key OPEC+ ministers resulted in maintaining current oil output policies, including the plan to begin easing one layer of production cuts from October.
Natural Gas
Gas futures for September settled down -$.068 or -3.34% at $1.968. U.S. natural gas futures stayed above $2.05 per MMBtu, maintaining the week's gains due to supply concerns and anticipated higher demand. Recent EIA data indicated that U.S. utilities added 18 billion cubic feet of gas for the week ending July 26th, which was only half of what financial markets had anticipated. This heightened supply worries in the U.S., especially with reports that Freeport LNG, the country's second-largest export facility, is drawing over 2 billion cubic feet of gas daily and is expected to resume full operations soon. Increased capacity for U.S. LNG exporters boosts international sales and intensifies competition for domestic consumers. Additionally, predictions of severe heat across the Lower 48 states have bolstered demand for gas-powered cooling.