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Oil Slips on Record Surplus Forecast, Nat Gas Drops Below $3 Despite Hotter Weather

Oil weakens as bearish sentiment builds
- WTI prompt-month fell $0.86 to $62.81/Bbl Thursday morning (7:45 AM CT)
- IEA warned the record oil surplus projected for next year is growing as OPEC+ revives production and non-OPEC supply climbs
- Global output is now expected to exceed consumption by 3.33 MMBbl/d in 2026, 360 MBbl/d more than the August forecast
- IEA sees a massive 1H26 surplus near 4 MMBbl/d as supply significantly outpaces demand
- Citi called the market a “tug-of-war between increasingly bearish fundamentals and heightened political risks” and kept its Brent forecast in the low $60s/Bbl through year-end and into 2026
Saudi Arabia to boost oil exports (Bloomberg)
- Exports will climb this month as rising production and lower domestic demand free up supply
- Crude available for export is set to rise by roughly 500 MBbl/d in September vs. August, per Kpler

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Updated regularly with the most important market moves and outlooks.

Natural gas slides below $3/MMbtu, despite near-term demand gains
- The October Henry Hub contract is down about 20c from its peak on Monday of $3.20/MMbtu
- Lower-48 weather forecasts shifted warmer, with next week expected to be several degrees hotter than the ten-year average, supporting gas power demand
- Gas production fell again this morning, with S&P data showing output at 105.6 Bcf/d
Mitsubishi Power sees gas-turbine demand remaining firm (BBG)
- Mitsubishi, a key supplier of natural gas powered turbines, anticipates demand for turbines will remain “very high” for three to five years and then remain robust for the next ten years
- Orders for turbines have surged globally due to data centers, new manufacturing, increased electrification, and the retirement of old units
- Turbine prices have increased more than 50% compared with five years ago and equipment supply is currently very tight, although the company plans to double turbine production capacity over the next two years