Daily Energy Report

Crude Oil Futures for October settled up $1.29 @ $54.93/bbl trading in a $1.34 range including the overnight-RBOB settled up 3.34/cpg and Heating Oil settled up 2.35/cpg. The EIA currently estimates that U.S. crude oil production averaged 11.7 mil/bpd in July, down by 300K/bpd from the June levels. EIA estimates that Gulf of Mexico crude oil production fell by more than 300K/bpd in July. The decline was partially offset by Lower 48 production, where supply rose by more than 100K/bpd. EIA expects monthly growth in Lower 48 production to slow during the rest of the forecast period, averaging 50K/bpd per month from the fourth quarter of 2019 through the end of 2020, down from an average of 110K/bpd per month from August 2018 through July 2019. EIA forecasts U.S. crude oil production will average 12.3 mil/bpd in 2019 and 13.3 mil/bpd in 2020, both of which would be record levels.

Natural Gas Futures for September settled down $0.028 @ $2.202/mmbtu trading in a .044 cent range including the overnight session. This past Friday, Beijing retaliated against the U.S. by levying tariffs on about $75 billion worth of goods including imposing additional tariffs on most energy imports from the U. S., Beijing announced it would impose 5% tariff U.S. crude oil from Sept. 1, the first time U.S. oil is targeted. In September of 2018 China had imposed 10% punitive duty on U.S. liquefied natural gas and then raised it to 25% in June. Imports of the fuel in the first 7 months shrank -84.6% on the year to 258,955 tonnes, according to Chinese customs. The escalating trade dispute has held back new long-term contracts such as one between Sinopec and U.S. exporter Cheniere Energy