Market Insights > First Look

First Look - Oil modestly rebounds after 6% plunge yesterday | November '24 Henry Hub loses more ground as it heads for expiry

Oil prices traded higher Tuesday morning, with WTI up 50c to $67.88/Bbl (8:07 AM) after yesterday’s 6% plunge

The premium of oil call options over the opposite puts has narrowed considerably, a sign that geopolitical risk premium has faded
Focus turns to oil’s underlying fundamentals as traders discount the chances of Middle East conflict affecting oil supply

Oil traders are split on whether OPEC+ will increase output at year-end (Bloomberg)

The group, led by the Saudis, is due to begin an unwinding of supply cuts with a hike of 180 MBbl/d in December
In a Bloomberg survey, sixteen of 30 respondents predicted that OPEC+ would opt to delay the supply increase
AEGIS notes that one reason the group would delay is that Brent crude is near its lowest price level since late 2021

November ’24 Henry Hub loses more ground as it heads for expiry
- Prompt gas was 8.5c lower to $2.224/MMBtu (As of 7:45 AM)
- Winter ‘24/’25 strip is down 1.0c to $2.792, and the Summer ’25 strip is down 2.3c to $2.991
- Prompt gas finished 25c lower yesterday amid weak heating demand and a global energy sell-off driven by reduced Middle East risks
- Lower 48 temps fell -1.9°F, mainly in the Rockies/West, with slight warming in the Midwest/South Central; The European Ensemble confirms a cooler trend with HDDs rising as temps approach the 10-year norm in the 11-15 day period (Criterion)
Boardwalk Pipelines targets FID on 1.5 Bcf/d Mississippi gas project for the southeast US market (S&P Global)
- Boardwalk Pipelines is nearing a final investment decision on the 1.5 Bcf/d Kosci Junction Project by year-end, with open season running through Nov 1, 2024
- The project features 100 miles of new pipeline linking the Greenville Lateral to Southern Natural Gas and Gulf South systems in MS, aiming for April 2029 service
- Greenville Lateral upgrades will access Utica, Marcellus, and Haynesville supplies; Boardwalk seeks additional anchor shippers amid strong Southeast demand
- Rival projects include Kinder Morgan’s Mississippi Crossing and Energy Transfer’s South Mississippi Project, addressing power demand growth from data centers and coal-to-gas shifts