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First Look - Oil heads for narrowest annual price range since 2019

Oil is higher this morning, reversing some losses from yesterday
- The API forecasts US crude inventories fell by 4.7 MMBbls last week, ahead of the official data release later this morning
- A note from UBS said that “crude inventories globally still seem to be in decline.”
Oil is heading for the narrowest annual trading range since 2019 (BBG)
- WTI has been in a price range of $22.40 so far this year, with only two years of the past two decades being smaller
- The lack of movement comes despite significant geopolitical risks and a major economic slowdown in China
- A senior strategist at Marex said, “Market volatility is finally normalizing following the pandemic and Ukraine war shocks of the past few years.”
- Part of the reason for the lack of price movement is that many of the risks this year came without disruption to physical oil flows, while spare capacity has returned to more normal levels

Natural gas traded higher Wednesday morning by 8c to $3.39/MMBtu (8:10 AM)
- Gas prices saw a mid-day reversal on Tuesday as hope lingered at the end of the two-week forecast for cold – maps are still warm
Energy Secretary Jenniffer Granholm urges caution on new LNG export terminals (AP)
- Granholm warned the incoming Trump administration about exports of LNG that could drive up domestic prices and be bad for the environment
- Her comments come after the release of a long-awaited study on the environmental and economic impact of LNG
- The study showed that US LNG drives up domestic wholesale prices and often replaces renewables
- Last week, Trump said that anyone making a $1 billion investment in the US “will receive fully expedited approvals and permits, including, but in no way limited to, all Environmental approvals.”
- Environmentalists will use the DOE analysis in lawsuits in the future