First Look - OPEC cuts oil demand forecast for 2024 and 2025

• Oil is trading higher by about $1, extending gains from last week
  • Market participants continue to monitor the Middle East for a potential Iranian attack on Israel
    • Iran reiterated its intent over the weekend amid military exercises near the border of Iraq
  • Speculators are holding the smallest net-long position in ICE Brent since data began in 2011
• OPEC cuts oil demand forecast (BBG)
  • OPEC trimmed its forecasts for global oil demand this year and in 2025, ahead of next quarter’s planned supply increase
  • The group reduced its projections for global demand growth in 2024 by 135 MBbl/d but still remains on the high end of estimates
  • Starting next quarter, OPEC plans to bring back roughly 543 MBbl/d in the first stage of returning 2.2 MMBbl/d of supply
  • If demand does not improve, OPEC may have difficulty bringing production back without oversupplying the market

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Interest Rate Charts and Tables

• Gas trades higher amid lighter supply readings and bullish bets by money managers
  • Prompt gas was 7.3c higher to $2.216/MMBtu (As of 8:04 AM)
  • Winter ‘24/’25 strip is up 2.6c to $3.285 and the Summer ’25 strip is up 2.3c to $3.223
  • According to CFTC and Bloomberg data, money managers increased net long positions to a six-week high in early August, driven by the unwinding of short positions and the expected rise in cooling demand (NGI)
  • The Lower 48 forecast remains steady with regional shifts, warmer in the Northeast and West, cooler in the Midwest, and overall temperatures around the ten-year average by late August (Criterion)
• Rex pipeline seeks to add 80,000 Dt/d of East-to-West capacity out of Ohio (S&P Global)
  • Rockies Express Pipeline (REX) plans to modify a compressor station in Ohio to increase east-to-west capacity by 80,000 Dt/d, addressing constraints in zone 3 of its bidirectional system
  • The project involves changing cylinder diameters at the Chandlersville compressor station
  • REX has requested FERC approval under a blanket certificate, with the capacity increase potentially raising total east-to-west capacity to 2.68M Dt/d
  • The company cites strong market demand for Marcellus and Utica gas, with basis differentials from Clarington to western markets exceeding average firm transportation rates