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Oil Holds Steady as Gaza Truce Lifts Risk Sentiment; Gas Flat Ahead of Storage Report

Oil Steady as Gaza Truce Deal Reached
- The WTI prompt-month contract rose $0.08 to $62.47/Bbl Thursday morning (7:45 AM CT)
- Israel and Hamas agreed to a truce that includes the release of all remaining hostages, marking a significant step toward ending a two-year conflict that has unsettled the Middle East and stoked global protests
  - Analysts at Rystad Energy said that if the agreement proves durable, the long-term impact on crude prices could be substantial; however, with the war in Ukraine ongoing, a geopolitical risk premium will likely persist
- US nationwide crude inventories rose for a second week but remain near seasonal lows, according to EIA data released Wednesday
  - Stocks at Cushing fell again alongside declines in refined-product inventories
China’s Strategic Stockpiling Supports Crude Prices (EIA)
- The agency estimates China’s crude inventories rose by around 900 MBbl/d from January to August, effectively absorbing supply from global markets and bolstering prices
- EIA noted that China’s stock builds have helped offset some of the downward price pressure that would normally result from rising global inventories

Regional Market Insights

Updated regularly with the most important market moves and outlooks.

Natural gas is flat ahead of EIA storage report
- The November Henry Hub contract is mostly unchanged after falling 16.5c yesterday
- The EIA is expected to report a 78 Bcf injection into underground storage for last week, with the Bloomberg survey ranging from a low estimate of 72 Bcf to a high of 82 Bcf
- While the shoulder season in gas demand is currently underway, Lower-48 weather forecasts show a switch from cooling demand to heating demand over the next two weeks
Gas flows ramp up on new Haynesville pipes (S&P)
- While production from the Haynesville region has remained relatively flat in recent weeks, gas flows on the two newest pipelines have ramped up
- The Louisiana Energy Gateway and New Generation gas pipelines started up earlier this summer, significantly expanding the amount of available pipeline capacity between northern Louisiana and the Gillis hub
- While production in the Haynesville is still down compared to 2023 levels, output is expected to increase sharply over the next few years, necessitating the increased pipeline capacity