Market Insights > First Look

Trump's Tariff Threats and Middle East Tensions Add Support

Oil extends rally as geopolitical risk rises
- The WTI prompt-month contract gained $0.57 to $63.20/Bbl Wednesday morning (8:02 AM CT)
- Crude has risen for a third straight session as markets digest President Trump’s threat to impose new tariffs on buyers of Russian crude
  - Trump told EU officials he would consider tariffs on India and China to pressure Moscow to end its war in Ukraine, but only if the EU joined the effort
- Geopolitical risk premium is creeping back into prices after Israel struck Hamas leadership targets in Doha, complicating US-led ceasefire negotiations
Traders eye China’s reserve buying (Bloomberg)
- Estimating China’s strategic petroleum reserve purchases remains difficult, as the data are closely guarded state secrets
- The SPR network has grown rapidly over the last two decades with a system of coastal tanks and underground caverns aimed at stabilizing supply and prices
- Without continued SPR buying, the outlook for oil demand is weak as fresh OPEC+ supply hits the market and consumption faces structural headwind, including accelerating EV adoption

Regional Market Insights

Updated regularly with the most important market moves and outlooks.

Natural gas prices trade lower despite marginally improved demand outlook
- Lower-48 weather forecasts have warmed over the past few days, with population-weighted temperatures now forecast to be slightly above the ten-year average through most of the next two weeks
- LNG feedgas is lower, at 15 Bcf/d, amid outages at Sabine Pass and Corpus Christi LNG
  - Cove Point is likely to start its annual month-long maintenance in a few days, possibly next week, which could result in weaker Northeast cash prices
NextDecade to announce FID on Rio Grande Train 4 soon (NGI)
- NextDecade Corp. has commercialized the fifth liquefaction train for its Rio Grande LNG project and is expected to announce a positive final investment decision on the fourth train soon
- An FID on train 5 could come as soon as November 15
- Rio Grande Train 1 is expected to enter service in early 2028, followed by Train 2 in the second half of the year
- According to AEGIS estimates, about 8.31 Bcf/d of new LNG feedgas capacity could FID by the end of 2025, with most projects entering service around the end of the decade