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Daily First Look
Daily briefChristian Drolshagen

Natural gas continues to fall amid near-term demand losses

Oil prices edged higher Tuesday morning by 43c to $58.75/Bbl (7:43 AM) as oil traders continue to digest the fallout from Venezuela

  • President Trump suggested the US may subsidize efforts by energy companies to help revamp Venezuela’s oil industry (Bloomberg)
  • In an interview with NBC news, Trump said the effort to have US oil industry companies “up and running” in Venezuela could be less than 18 months
    • Many energy experts would likely disagree with the short timeline of 18 months
  • The president also said he expected energy flows from the South American country helping to “reduce oil prices”

Leading up to Maduro’s capture, hedge funds layered on bullish bets (BBG)

  • Money mangers boosted bullish bets on WTI the most since November last week
    • “Smart money” were likely positioning ahead of some type of action that looked to be building in Venezuela with the US ratcheting up actions in the country
  • Net-long positions on WTI by 2,045 lots to 19,711 lots I the week ended Dec. 30 (CFTC)
  • AEGIS notes that money managers’ net length remains at very low levels. In fact, this category of traders has at times shifted to a net-short position over the past several months, reflecting a persistently bearish oil fundamental backdrop

Natural gas trades lower for another day as demand losses continue

  • The February contract is down about 13c this morning, after falling 10c yesterday (8:20 AM)
  • Lower-48 weather forecasts shifted warmer again, with temperatures expected to be mostly above the ten-year average for the next two weeks, and this week being particularly warm
  • Dry gas production remains down from recent highs, with output at 108.5 Bcf/d this morning, compared to highs of about 109.5 Bcf/d, according to data from S&P

Clearer timeline for US LNG projects in 2026 (NGI)

  • Several new projects should start up in 2026, with all of the Corpus Christi Stage Three trains and the first trains at Golden Pass entering service
  • Cheniere Energy recently said the three remaining trains at Corpus Christi Stage three should be online this spring, summer, and fall
  • By the end of 2026, Lower-48 LNG feedgas demand should rise to more than 22 Bcf/d, compared to current levels of about 19-20 Bcf/d

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