Your Daily Energy Report for August 27, 2024
Posted on 2024-08-27
Crude Oil
Crude Oil futures for October settled down -$1.89 or -2.441% at $75.53. On Tuesday, oil prices declined by approximately 2% due to concerns about reduced energy demand stemming from slower economic growth in major economies like the U.S. and China. This drop followed a significant 7% increase in prices over the preceding three days. Recent price gains were attributed to potential disruptions in Libya's oil production, which could affect about 1.2 million barrels per day, as well as escalating tensions in the Middle East following clashes involving Israel and Hezbollah in Lebanon. Additionally, expectations of an interest rate cut by the Federal Reserve next month have supported oil prices, as lower rates could stimulate economic activity and oil demand. Later today, the American Petroleum Institute will release weekly oil storage data, followed by the EIA's report tomorrow.
Natural Gas
Natural Gas futures for September settled down -$.052 or -2.658% at $1.904. On Tuesday, natural gas prices fell to their lowest point in four weeks due to a combination of factors including ample storage levels, weakening demand, and delays in production cuts, all contributing to significant downward pressure. As summer nears its end, particularly in northern parts of the U.S. where temperatures are expected to cool, the demand for natural gas is anticipated to decline. This shift has led to a more pessimistic view on prices. Norway's gas exports have surged this year, poised to challenge historical highs and surpassing Russia as Europe's primary gas supplier following reduced Russian exports after the Ukraine conflict. The short-term outlook for natural gas remains negative with diminishing summer demand and high storage levels likely to weigh on prices. Although late-summer heat waves could provide brief support, a substantial price recovery is unlikely before the onset of the winter heating season.