IEA Reports Strong Inventory Builds; Natural Gas Rebounds Ahead of EIA Storage Data

Crude eases as fresh agency data highlights rising global surplus

• The WTI prompt-month contract declined $0.39 to $64.24/Bbl on Thursday morning (7:52 AM CT)
• The IEA reported global inventories building at the fastest pace since the 2020 pandemic, reflecting strong supply growth alongside moderating demand
• Total stockpiles rose by roughly 477 MMBbls in 2025, with OECD inventories moving back above their five-year average for the first time in four years
• The agency lowered its demand growth outlook and now expects a surplus slightly above 3.7 MMBbl/d in 2026, a potential record annual imbalance
• Goldman Sachs’ Dean Struyven noted the emerging oversupply is concentrated in regions with less direct influence on benchmark pricing
• Geopolitical risk tied to US–Iran tensions continues to temper the bearish supply signal
• • President Trump said he informed Israeli Prime Minister Benjamin Netanyahu that Washington intends to continue diplomatic engagement with Iran, emphasizing a preference for a negotiated agreement

Natural gas trades higher, reversing losses from the last few days

• Lower-48 population-weighted weather forecasts continue to show above average temperatures this week, followed by cooler temperatures next week
• The EIA will release its weekly natural gas storage report this morning, with a median expectation of a -258 Bcf withdrawal, according to the Bloomberg survey
• LNG feedgas demand has been around 20 Bcf/d recently, but could rise further as Cheniere has submitted requests to begin flowing gas to Corpus Christi Stage 3 Train 5
• • Train 5 will have a capacity of 220 MMcf/d, and will be followed by Trains 6 and 7 this spring and summer

EIA raises Henry Hub forecast

• The EIA now forecasts natural gas prices to average $4.31/MMbtu for 2026, 85c higher than the January outlook
• The driver behind the higher forecast was January’s winter storm which resulted in a record draw from inventories
• The agency also increased their forecast for gas production, saying “the price increases relative to last month’s forecast moderate later in the year, and we expect the current high prices will encourage more natural gas-directed drilling”