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Daily First Look
Daily briefChristian Drolshagen

Oil climbs as the US continues to seize tankers

Oil prices traded higher Thursday morning as rapid new news headlines have traders reacting to the Venezuela

  • Brent was up over $1/Bbl to $61.15 while WTI pushed above $57/Bbl in am trading (8:00 AM)
  • Market for more heavy, sulfurous crude showed signs of weakness (Bloomberg)
    • Oil Grade Differentials:
    • Mars Blend -$2.23 – weakest since September 2024
    • WCS -$14.45 - weakest since late January 2025
    • Southern Green (US Gulf) -$3.65 – weakest since February 2023
  • Canadian Cold Lake crude, a grade that is similar to Venezuelan heavy oil, traded yesterday at a discount to WTI of $8.50/Bbl vs $6.80 on Tuesday
  • The idea that more Venezuelan crude will be available to the US is likely to back out or cause heavy discounts to similar grade Canadian oil

The US seized two more tankers carrying Venezuelan crude (BBG)

  • The Trump admin is keeping its aggressive posture by continuing to go after sanctioned Venezuelan crude after capturing Maduro
  • The first ship was seized near Iceland after a chase that began two weeks ago
    • The vessel, M/V Bella 1, even registered under a Russian flag in an attempt to protect itself
    • The War Department also announced the seizure of the M/T Sophia in the Caribbean
    • “The blockade of sanctioned and illicit Venezuelan oil remains in FULL EFFECT – anywhere in the world,” Defense Secretary Pete Hegseth wrote on X

Natural gas falls ahead of inventory report

  • The February Henry Hub contract is trading lower this morning, reversing gains from yesterday
  • The EIA will release its weekly natural gas storage report this morning, with a median expectation of a -113 Bcf withdrawal, according to the Bloomberg survey
  • While this week will be particularly mild, reducing gas demand, temperatures are forecast to fall back to the ten-year average next week

Waha prices weaken on maintenance and high production (S&P)

  • High production and pipeline maintenance have weighed on gas prices in the Permian Basin recently, with 2026 Waha basis weakening
  • While the Matterhorn pipeline completed a 500 MMcf/d expansion in November, the pipe filled quickly, offsetting bullish impacts on the basis
  • Reduced weather-driven demand in recent weeks has also had a negative impact on prices
  • In the second half of 2026, pipeline capacity out of the region is expected to improve as new projects enter service, potentially supporting basis prices

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