Oil & Gas Prices - August 14

[dan_s]

Trading Economics:

WTI crude oil futures dropped to $78 per barrel, extending losses for the second day after the EIA reported an unexpected increase in US crude oil stocks. US inventories rose by 1.357 million barrels last week, ending a six-week decline and defying expectations of a 2 million barrel drop. Conversely, gasoline and distillate stockpiles fell more than anticipated. The International Energy Agency's report indicated that inventory declines will slow in the final quarter, and OPEC lowered its demand forecasts for this year and next due to weak Chinese demand. Despite these factors, potential supply risks in the Middle East, particularly concerns over Iranian retaliation against Israel, prevented further declines in oil prices.

US natural gas futures rose over 5% to $2.25/MMBtu on Wednesday, the highest in around one month, due to a decrease in production and forecasts for hotter weather later in August. This hotter weather is expected to increase the use of air conditioning, boosting gas demand. Weather predictions now show more "cooling degree days," which measure how much energy is needed for cooling. LSEG predicts 224 of these days over the next two weeks, above the normal level. Additionally, US gas production has decreased to 102.6 billion cubic feet per day so far this month, down from July’s 103.4 bcfd and December’s record of 105.5 bcfd. This tightening of supply is expected to support prices, making them more responsive to any supply disruptions or additional heat.