Oil & Gas Prices - July 23

[dan_s]

Trading Economics:
WTI Oil
WTI crude oil futures fell below $65 per barrel on Wednesday, marking a fourth straight day of losses as investors focused on US trade talks.
> While President Trump announced deals with Japan and the Philippines, the EU is preparing to impose 30% tariffs on US goods if no agreement is reached. < Fear of the Trade War = Fear of Recession, which is primary reason WTI remains in the mid $60s/bbl.
> Treasury Secretary Scott Bessent said he will meet with Chinese officials in Stockholm next week to discuss extending the trade truce, possibly including China's purchases of sanctioned oil from Russia and Iran.
> Meanwhile, US government data showed crude inventories fell by 3.17 million barrels last week, more than expected. Gasoline stocks declined by 1.74 million barrels, while distillate stocks rose by 2.93 million. < The fundamentals point to higher oil prices. U.S. crude oil inventories are 9% below normal and Distillate inventories (diesel) are 19% below normal. U.S. refineries are running near maximum capacity and diesel inventories are dangerously low.
> Despite the larger-than-expected inventory drop, oil prices remain pressured by concerns that ongoing tariff tensions could weaken global demand, even as OPEC+ ramps up production.

Bottomline for oil price is that FEAR of the Tariff War is the only thing keeping WTI under $70/bbl. No mention of the fact that the war between Israel and Iran is far from over. I expect bombings to begin again soon, since Iran is not going to give up on their uranium enrichment program. Peace talks with Iran are a waste of time.

[dan_s]

US natural gas futures fell more than 5% to below $3.10/MMBtu, the lowest since April 22, pressured by near-record output and forecasts for milder weather than previously expected.
> While temperatures remain hotter than normal through at least August 6, the revised forecast now shows less intense heat, reducing near-term cooling demand.
> Despite the summer heat, analysts expect record-high production will continue to support strong storage injections.
> Stockpiles are already about 6% above the seasonal norm.
> According to LSEG, average gas output in the Lower 48 has reached 107.2 billion cubic feet per day in July, surpassing June’s record of 106.4 bcfd.
> Meanwhile, gas flows to the eight major US LNG export facilities have climbed to 15.8 bcfd so far in July, up from June, as some units gradually return from maintenance and unplanned outages.

Bottomline for Natural Gas: Weather is the primary driver of gas prices in the middle of the winter and the middle of the summer. What happened to Global Warming? It is back to HOT in the Houston area, so I do expect the weekly storage reports to be back to normal in August. My two big AC units are running close to 24/7.
Price volatility in the NYMEX futures for HH natural gas has been wild this year. If we have a HOT August, the SEP25 contract should snap back.

[dan_s]

WTI went up after the EIA petroleum report showed larger than expected decline in U.S. crude oil inventories.

Also: Trump has issued a fresh attack warning to Iran "if necessary" after Iranian Foreign Minister Abbas Araghchi stated that Tehran "cannot give up" nuclear ambition. IMO it is only a matter of weeks before Israel starts bombing Iran nuclear enrichment facilities again.