Market Insights > First Look

First Look - Oil Flat on Trade Tensions, Gas Drops on Storage and Cool Weather

Oil holds steady as market weighs India–Russia trade ahead of tariff hike
- WTI prompt-month rose $0.13 to $63.65/Bbl Friday morning (7:45 AM CT)
- Prices were little changed as traders assessed the outlook for Russian crude flows to India, amid escalating US criticism of the trade
- White House trade adviser Peter Navarro confirmed US import levies on Indian goods are set to double on August 27, with President Trump threatening to raise tariffs to as high as 50%
- Analysts at Morgan Stanley, including Martjin Rats and Charlotte Firkins, warned the oil market faces an “unusually large, yet unusually well-anticipated” surplus in the coming quarters
US targets Greek shipper, Chinese ports in latest Iran oil crackdown (Bloomberg)
- Washington sanctioned a Greek shipper and two Chinese port-terminal operators accused of moving Iranian oil
- The Treasury said Antonios Margaritis used his decades of shipping experience to “illicitly facilitate the transportation and sale” of Iranian petroleum
- China’s Foreign Ministry pushed back, calling the sanctions unlawful and urging the US to halt the measures, spokeswoman Man Ning said

Natural gas is trading lower and heading for a weekly loss
- Yesterday, the EIA reported a 13 Bcf injection into storage, which was smaller than expected and shrunk the storage surplus from +196 Bcf to +174 Bcf
- Gas demand over the next two weeks continues to look particularly weak, with this month forecast to be one of the coolest Augusts of the past 25 years
- Lower-48 gas production averaged 106.72 Bcf/d this week, a slight drop from last week’s 107.45 Bcf/d
Battery storage buildout to continue despite policy headwinds (S&P)
- While several clean energy tax credits have been curtailed by the latest federal budget bill, industry experts see fundamentals for utility scale power storage remaining strong
- Panelists at the Midcontinent Energy Summit said that battery storage has fared relatively well, with many tax credits being preserved through 2033
- Battery storage often directly competes with less-efficient natural gas peaking plants during times of high power prices, reducing gas demand even though the batteries are relatively small and short-lasting