Your Daily Energy Report for August 19, 2024
Posted on 2024-08-19
Crude Oil
Crude Oil futures for September settled down -$2.28 or -2.975% at $74.37. Crude oil prices continued to fall for the second consecutive sessions. The decline was influenced by diminishing concerns over supply due to potential progress towards a ceasefire in the Middle East. US Secretary of State Antony Blinken announced that Israel had agreed to a proposal aimed at resolving the ongoing delays in a ceasefire and hostage release in Gaza, calling on Hamas to follow suit. Nonetheless, Hamas's recent claim of responsibility for a Tel Aviv bombing has heightened fears of a wider conflict. In addition, China's demand for oil is under pressure due to recent economic setbacks, including slower growth, dropping home prices, and increasing unemployment. These issues have led Chinese refineries to reduce their crude processing activities, further decreasing oil demand.
Natural Gas
Natural Gas futures for September settled up $.112 or 5.276% at $2.235. Natural gas prices surged on Monday, approaching a one-month high amid tightening supply and demand. Forecasts predict intense heat across much of the western, central, and southern US this week, which is expected to drive up cooling demand and boost natural gas use. Although cooler weather is expected in the Northeast and Midwest, which may dampen some demand, an unusual mid-summer storage withdrawal reported by the EIA, the first in August since 2006, reflects higher cooling needs. Additionally, lower production levels at 100.6 Bcf/d have further supported prices. In the Middle East, Iran is embarking on a $70 billion investment program to attempt to halt a dramatic decline in output from its crucial South Pars gas field.