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Oil Slips as Seaborne Barrels Hit Record High; Gas Dips Amid Warmer Forecasts

Oil declines as seaborne barrels hit record levels
- The WTI prompt-month contract dropped $0.88 to $60.43/Bbl Tuesday morning (7:45 AM CT)
- Global crude volumes at sea surged to a new high with nearly 1.4 billion barrels are currently aboard crude tankers, according to Vortexa data
- Crude prices rebounded from five-month lows last week after the Trump administration sanctioned Russian exporters Rosneft and Lukoil
- OPEC+ is expected to target another modest production increase in December when key members meet this weekend, per Bloomberg
  - The group is anticipated to discuss a third monthly hike of 137 MBbl/d on November 2, as part of its phased restart of 1.66 MMBbl/d
Indian refiners weigh Russian crude options post-sanctions (Bloomberg)
- India’s state-run refiners are exploring ways to keep buying discounted Russian cargoes by working with smaller suppliers instead of sanctioned firms Rosneft and Lukoil
- Indian Oil will “absolutely not discontinue” Russian crude purchases as long as they comply with international sanctions, said finance director Anuj Jain
  - “If someone offers a non-sanctioned entity, the price cap is met, and shipping is clear, then I will continue to buy,” Jain added

Regional Market Insights

Updated regularly with the most important market moves and outlooks.

Natural gas trades lower as weather forecasts warm
- Lower-48 population-weighted forecasts warmed significantly in the 11-15 day period, but temperatures are still forecast to be below the ten-year average for most of the next two weeks
- Gas production remains around 106 bcf/d, compared to highs of more than 108 Bcf/d seen at the end of August
Abaxx sees possibility for global LNG benchmark (NGI)
- Abaxx Technologies launched physically settled LNG futures in 2024, and has seen a sharp increase in volumes in recent months
- Total volume since futures began trading amounts to 14k contracts or the equivalent of about 40 LNG cargoes
- There is currently no global benchmark for LNG prices, but Abaxx expects liquidity to continue to grow in their US Gulf Coast, Asia, and European LNG contracts
  - The company’s Chief Commercial Officer said, “Because liquidity tends to pool in one contract, we expect that one of these three contracts will ultimately be chosen by the market as the global LNG benchmark, and the others will tend to trade as spreads to it”