Crude Steady as IEA Highlights Severe Inventory Draws, Gas Up as Softening Supply Offsets Demand Losses

Crude prompt steady as IEA highlights rapid inventory draws

• The WTI prompt-month contract gained $0.40 to $102.58/Bbl on Wednesday morning (7:30 AM CT)
• Oil futures remained near $102/Bbl after the IEA estimated global observed crude and product inventories fell by roughly 4 MMBbl/d across March and April
• The agency warned that even if a diplomatic agreement is reached, restoring crude flows through the Strait of Hormuz could take considerable time
• • “It could take weeks or even months for transit through the Strait to return to normal levels,” Toril Bosnoi, head of the IEA’s oil markets and industry division, said
• The IEA also lowered its global demand outlook for a third consecutive month as elevated prices and disrupted fuel trade continue to pressure consumption
• • Global oil demand is projected to decline by 2.45 MMBbl/d in 2Q 2026
• Expectations of weaker global oil consumption may be contributing to a steeper backwardated curve this morning, with deferred contracts under pressure and the Cal 2027 strip falling below $76/Bbl.
• Separately, Saudi Arabia told OPEC that its crude production fell to the lowest level since 1990

Natural gas is up as softening supply offsets demand losses

• Natural gas is up 5.4c to $2.897/MMBtu (As of 07:43 AM CDT)
• Total L48 production slipped to 108.8 Bcf/d, led by losses in the Northeast and GOA
• • Canadian imports also pulled back 0.3 Bcf/d pulling total supply to 113 Bcf/d, a recent low (Criterion)
• The implied net balance came in at a 9.4 Bcf injection, tightening by almost 10 Bcf from earlier in the week (Criterion)

Relatively mild 2026 weather has affected L48 regions storage levels differently

• Heading into the summer months the Rockies, Pacific, and South Central regions are all >50% full in storage capacity at 73%, 66%, and 61% respectively as of May 1st (S&P)
• East and Midwest storage levels remained lower at 37% and 38% full, potentially increasing summer injection demand in those regions

L48 feedgas demand further weakens to 17.5 Bcf/d

• Feedgas pulled back 714 MMcf/d this morning to a fresh new low, led by losses at Freeport, Plaquemines, Golden Pass, and Sabine Pass (Criterion)
• • This is despite a comeback from Corpus, which gained 319 MMcf/d in nominations this morning
• Calcasieu Pass 2 construction phase 1 on track for first LNG in 2H27
• • Venture Global maintained the target start date for the 1.33 Bcf/d facility in its recent earnings call