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Crude oil futures fell on Friday but ended the week higher on signs of stronger U.S. demand and growing awareness of the risk that a broader Middle East conflict could jeopardize the flow of oil from the region.
comminicate Fighting between Israel and Hezbollah on the Lebanese border has escalated and hostile rhetoric has grown, with Hezbollah threatening that no place in Israel is safe in an all-out conflict that could even involve Cyprus.
Houthi rebels continued their offensive in the Red Sea this week, and far away in the Middle East, drones from Ukraine struck four Russian oil refineries and other military targets.
A weekly report on U.S. inventories also provided support for an unexpected draw in gasoline stocks as demand rose to its highest level this year.
While the average four-week year-to-date gasoline demand is still down slightly, this suggests “drivers are reluctant to take to the roads” [have] Start taking risks,” said Phil Flynn of Price Futures Group.
However, although overall EIA data shows a tightening in the U.S. oil market, Commonwealth Bank of Australia analyst Vivek Dhar said, “In the short term, we believe that disappointing market expectations for Chinese oil demand growth are the main downside risks to consider.”
Front-month NYMEX crude oil (CL1:COM) for August delivery has been settled +3.4% This week it reached $80.73/barrel, with front-month August Brent crude oil (CO1:COM) closing +3.2% This week it reached US$85.24/barrel, down 0.7% and 0.6% respectively on Friday.
U.S. July gasoline futures (XB1:COM) rose for a fourth straight day, rebounding despite a decline in crude oil prices on the day +4.8% It rose to a one-month high of $2.51 per gallon this week.
U.S. natural gas falls for second consecutive week, front-month July contract (NG1:COM) settles -6.1% Prices for the week are at $2.71/MMBtu, following a 1.3% drop last Friday.
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In a new analysis this week, Goldman Sachs forecast that production growth in the mature Permian Basin may gradually slow, from an unusually strong 520,000 bpd in 2023 to a still strong 270,000 bpd in 2026 .
Goldman Sachs highlighted two reasons why Permian Basin growth will continue to slow until production peaks later this decade: Geological constraints will continue to impact growth in initial production from new wells, limiting the basin’s long-term production potential, the bank expects The Permian Basin’s long-term production potential will continue to slow.
But Goldman Sachs believes growth in the Permian Basin will remain strong in 2026 as improved efficiency shifts the mix toward newer, more productive wells, with its 2024-25 WTI forecast at $76-$79/b, slightly higher than Its estimated Permian breakeven price is $74/barrel.
The energy industry represented by the Energy Select Industries SPDR Fund (NYSE:XLE), the second strongest performer this week, +1.9%.
Top 5 Energy and Natural Resources Gainers in the Past 5 Days: Nano Nuclear Energy (NNE) +122.5%Newcastle power supply (SMR) +19%Sasol (SSL) +18.6%Midstream Partner Summit (SMLP) +15.8%Maritime Castor (CTRM) +13.6%.
Top 5 losers in energy and natural resources over the past 5 days: Battalion Oil (BATL) -30.5%Cross Timbers Concession Trust (CRT) -18.9%Plug power supply (PLUG) -15.1%Bloom Energy (BE) -15.1%Magnetic flux power (FLUX) -14.8%.
Source: Barchart.com
