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First Look - Crude Stuck In Narrow Band While US Gas Steadies Ahead Of EIA Storage Report

Oil steady as surplus risks resurface
- WTI prompt-month slipped $0.12 to $64.03/Bbl Thursday morning (7:45 AM CT)
- Crude held within its recent narrow band as traders balanced the risk of a looming supply glut with ongoing US efforts to push India away from Russian crude purchases
- Ukraine intensified drone strikes on Russia’s oil sector, hitting two more refineries after a string of recent attacks
- Citigroup said oil prices should average lower in Q4 as oversupply begins to weigh more heavily on balances
  - Sanctions, tariffs, and refinery outages in Russia have provided near-term support
  - Market pricing continues to reflect tightness in medium crude grades and concerns about gasoil inventories heading into the winter heating season
US gasoline prices dip year-on-year into Labor Day (EIA)
- The average retail price for regular gasoline was $3.15/gal on August 25, the Monday before Labor Day weekend, 5% (17¢/gal) below year-ago levels
- Lower crude costs, driven by rising global supply, have been the main contributor to softer pump prices
- Crude oil typically accounts for a little more than half of the retail gasoline price, making the current downturn in crude a key driver of holiday travel costs

Regional Market Insights

Updated regularly with the most important market moves and outlooks.

October Henry Hub holds gains, ahead of EIA storage report
- Prompt gas prices have increased over the past few days, after falling to new lows earlier this week
- Lower-48 gas production has trended lower this week after reaching 108.2 Bcf/d over the weekend, with today’s data showing output at 107 Bcf/d
- FERC has given Venture Global permission to flow gas to the remaining Plaquemines LNG blocks, which should allow the facility to reach 3.7 Bcf/d soon
- Golden Pass LNG nominations jumped to a new record of 10 MMcf/d, as the facility starts up
Below-average storage build expected (S&P)
- A survey of analysts found that a storage injection of 26 Bcf is expected to be reported by the EIA this morning
- If confirmed, this would narrow the surplus to the five-year average for a second consecutive week
- While this week’s inventory report may be bullish compared to the five-year average, the following two reports will likely be larger than average, given mild weather this week and next