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Oil futures gave up early gains and settled lower on Friday, capping off the first weekly loss after four straight positive weeks, as the recent rally in prices allowed traders to to exit their positions with healthy profits.
Prices are supported by A weak U.S. inflation report this week boosted hopes of a September interest rate cut by the Federal Reserve, fueling expectations of higher energy demand, as well as a bullish U.S. inventory report that showed larger-than-expected declines in crude and gasoline stocks. Jet fuel demand on a four-week average was at its strongest since January 2020.
But Friday’s producer price index report came in slightly above expectations, and concerns remain over demand from China, where International Energy Agency data showed oil demand contracted in April and May.
“Increasing expectations of Fed rate cuts coupled with a constructive oil balance suggest that Prices will remain well supported.“We continue to maintain our view that the average price of Brent crude on the Intercontinental Exchange will be $88 per barrel in the current quarter,” analysts at ING Bank said, according to Dow Jones.
According to Baker Hughes, the number of oil rigs in the United States has reached its lowest level in two and a half years, but the United States has been producing record amounts of crude oil, largely due to drilling efficiency.
The U.S. Energy Information Administration reported production of 13.3 million barrels per day last week, and expects full-year average production to be 13.2 million barrels per day. The agency raised its 2025 forecast to 13.8 million barrels per day.
NYMEX CL1:COM August delivery contract expires -1.1% To $82.21 a barrel this week, including Friday’s 0.5% loss, Brent crude for September (CO1:COM) closed the week. -1.7% to $85.03 a barrel after falling 0.4% on Friday.
U.S. natural gas futures rose for the first time in four days on expectations that the Freeport LNG export plant will soon resume operations after being shut down by Hurricane Beryl; August Nymex natural gas was at its lowest level in two weeks. +0.4% For the week to $2.329/MMBtu.
Exchange-traded funds:NYSEARCA: Use), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)
Baby Baby) Raised its forecast for oil and gas demandas renewable energy sources such as wind and solar are not growing fast enough to keep up with the growth in global energy demand.
in Energy Outlook 2024The world may be shifting away from fossil fuels too slowly to avoid dangerous climate change, raising the risk that the eventual transition to clean energy will be “costly and disorganized”, BP has warned.
If the current slow trend continues through the early 2040s, the world may have exhausted the so-called “carbon budget” that would limit warming to 2 degrees Celsius above pre-industrial levels, according to the report.
The energy sector, represented by the Energy Select Sector SPDR ETF (XLE), ended the week +0.4%.
Top 10 Energy & Natural Resources Stocks Gaining Over the Past 5 Days: Pineapple Energy (PEGY) +77%Solaris Oilfield Infrastructure (SOI) +44.7%Flux Power Holding Company (FLUX) +42.6%Hawaiian Electric Company (HE) +29.1%TPI Compounds (TPIC) +27.6%Solid State Drive (SLDP) +27.2%Nuclear energy (SMR) +25.5%Vivo Power (VVPR) +25%silver cats +23.1%AMRC +22%.
Top 5 Declining Companies in the Energy & Natural Resources Sector Over the Past 5 Days: ZIM Integrated Shipping (ZIM) -22.9%Nano Nuclear Energy (NNE) -11.9%Durian LPG (LPG) -8.7%Ardmore Shipping Company (ASC) -8.7%hidden gas (GASS) -8.4%.
Source: Barchart.com