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Oil Climbs as API Reports Cushing Draw; EIA Trims Gas Price Outlook

Oil rises despite reported build in US inventories
- The WTI prompt-month contract gained $1.02 to $62.75/Bbl Wednesday morning (7:45 AM CT)
- The API reported a 2.8 MMBbl increase in nationwide crude stocks last week, even as holdings at Cushing fell 1.8 MMBbl and oil-product inventories declined
  - Official EIA data will be released later Wednesday
- The EIA’s latest Short-Term Energy Outlook shows US crude output for 2026 running about 200 MBbl/d above its September projection.
- Production is expected to set a record this year and remain near that level in 2026, driven by stronger-than-expected growth from the Gulf of Mexico
Indian refiners seen boosting Russian oil purchases (Bloomberg)
- Indian refiners are poised to increase crude imports from Russia in the coming months as trade talks with Washington drag on and discounts widen amid ample supply
- Urals crude is trading at $2 – $2.50/Bbl below Dated Brent, making it attractive for state processors, according to people familiar with the talks

Regional Market Insights

Updated regularly with the most important market moves and outlooks.

Natural gas trades lower, reversing yesterday’s gains
- Weather forecasts shifted cooler, with Lower-48 population-weighted temperatures forecast to be near or below average for the next two weeks
- Gas production remains lower for the second day, with output at 104 Bcf/d compared to 106.2 Bcf/d on Monday
  - The Northeast region is where most of the decrease has originated from, although Permian maintenance is also reducing volumes
EIA sees higher gas prices, but lowers forecast from last month (EIA)
- In the latest Short-Term Energy Outlook, the EIA lowered its 2026 Henry Hub spot price forecast by 8% from $4.30/MMbtu to $3.90/MMbtu, reflecting higher production estimates
- The EIA forecasts Lower-48 gas storage to reach 3.98 Tcf by the start of Winter ‘25/’26, a 70 Bcf increase from the September STEO, which would put inventories near the top of the five-year range
- The agency also noted in its report that while 4% of US coal power plant capacity is expected to retire this year, recent investments by the DOE could extend the life of some coal plants