Oil & Gas Prices - July 16

[dan_s]

WTI at $81.17/bbl at the time of this post.

Trading Economics:

Crude Oil
WTI crude oil futures fell to $80.5 per barrel on Tuesday morning, the lowest in three weeks.
>It marks the third consecutive session of losses, driven by concerns over weakening demand as the Chinese economy slows down, despite expectations that the US Federal Reserve may soon cut interest rates.
> China's economy grew by 4.7% in Q2 (wish the U.S. had that rate of growth), the slowest since early 2023 and below the 5.1% forecast, due to a prolonged property downturn and job insecurity.
> In the US, Fed Chair Jerome Powell noted that recent inflation data supports confidence in achieving the central bank's target, suggesting potential interest rate cuts. Lower interest rates can boost economic activity and increase oil demand.

U.S. Natural Gas
US natural gas futures rose toward $2.2/MMBtu, recovering from a 10-week low as power demand hit a record high due to extreme heat.
> Hot weather is expected to persist, keeping power generators reliant on gas. On July 9, a record 54.1 bcfd of gas was used for power generation.
> This price increase occurred despite forecasts of reduced demand because of a slower return to full power at Freeport LNG's Texas export plant. < Freeport continues to have the most operational issues of all of our LNG export facilities.
> Gas flows to LNG export plants have decreased to 11.8 bcfd so far in July from 12.8 bcfd in June due to the shutdown of Freeport LNG. < Including Freeport, U.S. current LNG export capacity is ~14.5 Bcfpd. U.S. LNG export capacity should reach 17.8 Bcfpd by end of 2024 and 19.8 Bcfpd by end of 2025.
> Gas prices have been low for four of the past five weeks due to high output and oversupply, with storage levels 18% above normal.
> Gas production in the Lower 48 states averaged 102.2 bcfd so far in July, up from 100.2 bcfd in June.