Market Insights > First Look

First Look - Crude heads for second weekly gain as prices continue to recover

Oil trades lower this morning but is heading for a second weekly gain
- WTI prices are up more than $2 this week and more than $6 from the lowest prices seen last week
- The Federal Reserve interest rate cut earlier this week has helped boost prices, with equities and other rate-sensitive asset classes also rising
US lawmakers eye tougher Iran sanctions (Argus)
- Republican lawmakers urge President Biden to enforce tougher sanctions on Iran to curb crude sales to China while US officials debate the effectiveness and consequences of existing sanctions
- Former Trump officials told a House panel that existing sanctions against Iran ought to be enforced more rigorously
- Iranian crude exports staged a steady recovery, now holding well above 1.5 MMBbl/d, mainly to China at a discount

Natural gas prices edged higher Friday morning, up 3.1c to $2.38 (8:13 AM CST)
- The natural gas weather-adjusted supply and demand balance continues to be extremely tight
- The EIA reported a 58 Bcf injection on Thursday, falling short of expectations but still lighter compared to previous years
- Gas demand to ease nationally as a seasonal drop in temperatures is forecasted over the next 15-day period
The gas market has been at least 4 Bcf/d tight for many weeks now – when controlling for weather
- The tightest Lower 48 natural gas had been this year was about 2 Bcf/d at times, by our estimates
- Nymex Henry Hub floundered on either side of $2/MMBtu from July to early Sept. Lower prices forced supply to be reduced, contributing to a tighter market
- Supply reductions may be the leading cause of the tighter market, but power burns and LNG flows have been strong performers as well
- AEGIS notes that many analysts assume production will rise if prices increase into winter – this could reduce how bullish the weather-adjusted S&D is
Natural gas in underground storage rose by 58 Bcf for the week ended Sept. 13, according to the EIA
- The median forecast was 55 Bcf
- The surplus to the five-year average narrowed to 274 Bcf
- AEGIS expects the storage level to end the injection season near 3.9 Tcf