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First Look - Weekend OPEC+ Decision Could Reshape Balances Heading Into 4Q

Oil extends losses on OPEC+ supply risk and weak US jobs data
- The WTI prompt-month contract fell $0.73 to $62.75/Bbl early Friday
- Saudi Arabia is pushing OPEC+ to consider reviving additional production ahead of its planned return at the end of next year, aiming to reclaim market share
- The group meets Sunday to discuss a 1.66 MMBbl/d tranche of halted supply, though a decision is not guaranteed and resistance from some members is possible
- Analysts warn that any production hike could add to downward price pressure and exacerbate a potential 4Q surplus, even as it benefits consumers and boosts political capital for President Trump
- Commerzbank wrote that another increase would place significant downward pressure on oil prices due to surplus risks
- The Bureau of Labor Statistics reported US job growth of just 22,000 in August, well below the 75,000 expected, signaling slowing economic momentum
China’s oil stockpiling to slow, adding to bearish outlook
- China’s crude inventories, currently near 1.7 BBBbls, are expected to build more slowly in 4Q, according to ANZ analysts
- The country has aggressively stockpiled crude this year, taking advantage of OPEC+ supply increases to bolster energy security
- Restocking is likely to taper due to weaker economics, competition from new refining capacity, and domestic demand headwinds
- Analysts expect the slowdown to tip the global market into a sizeable surplus, reinforcing downward pressure on prices

Regional Market Insights

Updated regularly with the most important market moves and outlooks.

Natural gas rises for a second week, as October contract rally continues
- The prompt Henry Hub contract is up 11c this week, bringing gains over the past two weeks to 39c (8:15 AM)
- The demand outlook over the next few weeks continues to look limited, with temperatures remaining at or below the ten-year average
- Cove Point LNG is expected to enter its annual month-long maintenance around September 15, which could result in weaker cash prices in the northeast
NG3 pipeline starts shipping gas (S&P)
- Flows on the New Generation 3 pipeline have picked up to about 300 MMcf/d, after first flowing about 100 MMcf/d on August 27
- The NG3 pipeline will support pipeline egress capacity in the Haynesville, expanding it by 1.7 Bcf/d initially
- This startup is sooner than many expected, as Expand Energy said in their last earnings call that flows are expected for the fourth quarter of 2025