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Oil Eases on OPEC+ Supply Hike; Natural Gas Rises as Output Hits Multi-Month Low

Oil dips as traders weigh OPEC+’s modest output increase
- The WTI prompt-month contract fell $0.13 to $61.56/Bbl Tuesday morning (7:45 AM CT)
- OPEC+ approved a 137 MBbl/d production hike, signaling caution amid weakening market indicators
- The alliance has been gradually restoring supply to reclaim market share, even as producers across the Americas continue expanding output
- Traders are also monitoring ongoing Ukrainian drone strikes on Russian energy infrastructure that could disrupt regional supply flows
Russian crude exports near capacity as Ukrainian attacks intensify (Bloomberg)
- Russia’s four-week average seaborne crude exports held near a 16-month high at 3.57 MMBbl/d
- Drone strikes on Russian refineries have redirected barrels to export terminals, pushing those facilities close to operational limits
- Refining runs have fallen below 5 MMBbl/d, while spare export capacity appears minimal as European nations tighten restrictions on Moscow’s shadow tanker fleet

Regional Market Insights

Updated regularly with the most important market moves and outlooks.

Natural gas prices move higher, as production slides to multi-month low
- According to data from S&P, Lower-48 gas production is down 2.25 Bcf/d this morning to 103.85 Bcf/d, putting production at the lowest level since earlier this year
  - This drop is split across numerous pipes in the Northeast and Permian
  - This data could later be revised higher
Targa adds Permian midstream projects (NGI)
- Targa has approved construction on the 275 MMcf/d Yeti gas processing plant in the Midland basin, along with five more processing plants to be constructed over the next two years with a combined capacity of 1.4 Bcf/d
- In addition to processing capacity, Targa is building new pipelines to connect their Delaware and Midland gas systems, called the Buffalo Run and Bull Run projects
- The company is also moving forward with the 500-mile Speedway NGL pipeline that will connect from the Permian to Mont Belvieu