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Daily briefNarciso Cano

Freeze-Offs and Arctic Cold Drive Gas Vertical; IEA Lifts Crude Demand Outlook

Crude holds steady following IEA OMR release

  • The WTI prompt-month contract edged up $0.08 to $60.44/Bbl on Wednesday morning (7:45 AM CT)
  • The International Energy Agency modestly raised its 2026 global oil demand growth forecast, slightly narrowing the projected supply surplus
    • World oil consumption is now expected to rise by 930 MBbl/d in 2026, a small upward revision from prior estimates
  • The IEA noted that ample inventory buffers are helping insulate prices from supply risks tied to Iran, Russia, Kazakhstan, and Venezuela
  • Global stockpiles are forecast to build by 3.7 MMBbl/d this year, though the agency cautioned that realized balances may undershoot headline projections

Kazakhstan oil flows set to recover (Bloomberg)

  • Final-stage maintenance is underway to restore offshore Mooring 3 at the Caspian Pipeline Consortium export terminal
  • The restart is critical for Kazakhstan, which exports roughly 90% of its crude via the CPC system
  • A return of Mooring 3 could lift export volumes in the final days of January
    • January CPC Blend loadings were cut by roughly 45% from the original program to an estimated 800–900 MBbl/d
  • Recent CPC disruptions tightened prompt supply, lending near-term support to crude prices

February natural gas gains another 90c after yesterday’s 80c rally

  • The prompt Henry Hub contract has surged more than $1.50/MMbtu since Friday’s settlement with February trading around $4.80/MMbtu (8:00 AM)
  • Over the past several days the near-term demand outlook has improved significantly, with Lower-48 population-weighted temperatures forecast to be more than 10 ºF below the ten-year average for much of the next two weeks
  • The incoming cold weather should send gas demand to a seasonal high and result in a very large storage withdrawal for the week of January 30, potentially 350+ Bcf
  • Freeze offs are already impacting gas production, with output at 106.5 Bcf/d this morning, according to data from S&P
    • Production losses should continue to rise through this weekend, peaking on Saturday

Weather forecast shift colder again (CWG)

  • Overnight, weather models cooled again, with major concerns for a large-scale ice storm across much of the southern US while the Midwest and Northeast also experience freezing weather
  • Forecasts currently show ice accumulation in the Permian and Haynesville regions, which will likely result in gas production free offs
  • Commodity Weather Group noted that the end of the 11-15 day period for the AIFS weather model appears to be setting the stage to support colder sub-seasonal models

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