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First Look - Oil Finds Support as Market Refocuses on Fundamentals

Oil rises on US inventory expectations
- WTI prompt-month gained $0.68 to $63.03/Bbl Wednesday morning (7:45 AM CT)
- API data showed a 2.4 MMBbl draw in U.S. crude inventories last week; EIA figures due later today
- “Focus is gradually shifting back towards fundamentals,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management
- A confirmed draw in government data could support prices, as many fear large builds later this year
India steps up Russian oil purchases despite US pushback
- State-run refiners resumed buying Urals crude for September and October loadings after a brief pause
- Buyers include Indian Oil Corp and Bharat Petroleum Corp, even as US officials criticize the purchases
- Discounts have widened, with Urals now trading $2.50/Bbl below Dated Brent, incentivizing Indian refiners to return to the grade

Natural gas is down slightly, extending losses from yesterday
- Lower-48 weather forecasts shifted cooler again, leading to another drop in expected demand over the next two weeks
- LNG feedgas is up this morning to 15.9 Bcf/d, after falling to an August low of 14.9 Bcf/d yesterday, amid Freeport LNG issues
- Golden Pass LNG continues to take small volumes of gas ahead of startup, averaging about 1 MMcf/d
Rockies Express Pipeline plans lateral to Colorado Springs (S&P)
- REX submitted an application to FERC to build a 153-mile lateral from the Cheyenne Hub to Colorado Springs
- The pipeline will support growing demand, as Colorado Springs Utility is planning a new 400 MW gas-fired power plant
- The lateral should have a capacity of 250 MMcf/d