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Daily First Look
Daily briefChristian Drolshagen

Oil jumps as new Iran risks surface

Oil heads for another weekly gain amid new Iran risks

  • The February WTI contract is on track to gain more than $1.50/Bbl this week, with prices at a multi-week high
  • Meanwhile, Goldman Sachs said in a note that its clients are the most bearish on crude in 10 years, amid continued expectations of a large global surplus in 2026

Iranian protests spark supply concerns (Bloomberg)

  • New risks to global crude supply have surfaced in the last two days, as protests against the Iranian regime have grown, now the largest since 2009
  • President Trump has recently reiterated warnings to the regime not to kill protestors, saying “If they do that, they’re going to have to pay hell”
  • Concerns of supply disruptions can be seen in the options market, with second-month WTI call skew jumping to the highest level since June
  • A/S Global Risk Management's chief analyst said, "There is growing concern in the market that the US, with Trump at the helm, could exploit the chaos and attempt to overthrow the regime, as we have seen in Venezuela"

Natural gas on track for a second weekly decline

  • The prompt month Henry Hub contract is down about 40c this week, as prices continue to trend lower in the absence of strong weather-driven gas demand
  • Lower-48 weather forecasts show temperatures falling over the next two weeks, but not going significantly below the ten-year average
  • Yesterday, the EIA reported a -119 Bcf withdrawal from underground storage, which put inventories 31 Bcf above the five-year average and 123 Bcf below last year

ICE extends European trading hours to align with Henry Hub (NGI)

  • The UK and continental Europe will expand natural gas and electricity trading hours, enabling nearly continuous arbitrage opportunities for US LNG
  • The change aligns trading with peak liquidity at Henry Hub
  • Spreads between Henry Hub and global gas prices may adjust more quickly to fundamentals now

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