Market Insights > First Look

First Look - Federal court suspends the DOE's LNG export permit pause

Oil is trading higher ahead of expected inventory draw
- The API is forecasting a draw of 9.2 MMBbls ahead of the official data release by the EIA today
Rystad cuts Permian oil growth forecast (BBG)
- Citing industry consolidation and a slowdown in drilling, consultancy Rystad sees Permian supply growth slowing
- Rystad expects production to grow by 252 Mbbl/d between the last three months of 2023 and the fourth quarter of 2024, down from its prior forecast of 362 MBbl/d
- Their report stated, "Continued consolidation is putting pressure on Permian drilling levels,” and “we no longer expect a significant drilling recovery later this year.”
Diesel refining margins in Asia are improving (BBG)
- Asian diesel cracking margins are up about 30% over the past month, as unexpected refinery outages have provided relief to margins that have suffered this year
- The outages have forced some refiners in Asia to seek millions of barrels of diesel and jet fuel for June and July
- Improved refining margins should support crude prices

Natural gas prices trade modestly higher after finishing at a seven-week low yesterday
- Prompt gas was 1.4c higher to $2.449/MMBtu
- The Summer ’24 strip is down 2c to $2.503 and Winter ‘24/’25 strip is down 1.5c to $3.399
- Today's European ensemble forecasts cooler temps for the Lower 48, with a 5.2-degree average drop, especially in the Midwest and Rockies, and a shift to near-normal temps from earlier above-normal patterns (Criterion)
Federal court suspends the DOE’s LNG export permit pause (PG&J, Criterion)
- US District Judge James Cain has halted the DOE's pause on LNG export approvals, criticizing the DOE's reasoning as "completely without reason or logic"
- It's uncertain if the suspension will speed up pending approvals or if the DOE will continue to delay non-FTA permit applications
- The Biden administration's January pause aimed to review the economic and environmental impacts of LNG export projects to Europe and Asia
- Republican-led states sued, arguing the pause harms the economy and undermines efforts to supply LNG to Europe as it reduces dependence on Russian gas