Oil Trades Below $70 as Banks Lower Price Forecasts; Gas Gains as July Heat Strengthens

WTI trades below $70/Bbl

• The WTI prompt-month contract declined $0.53 to $69.81/Bbl on Thursday morning (7:30 AM CT)
• Goldman Sachs' Dan Struyven said the market underestimated how quickly crude prices would retreat following the US-Iran ceasefire, arguing analysts "underappreciated the flexibility in the system"
• • Struyven said available crude inventories, alternative export routes, and resilient non-OPEC supply helped absorb the disruption more effectively than expected
  • He also noted Goldman expects China to resume replenishing crude inventories if prices remain at lower levels but acknowledged there is uncertainty around that assumption
  • The bank lowered its 4Q26 Brent forecast to $80/Bbl from $90/Bbl last week
• JPMorgan also reduced its Brent price outlook for the next four quarters, saying demand destruction, rather than inventory drawdowns, accounted for a larger share of the market's adjustment to the Strait of Hormuz supply disruption than previously expected
• • The bank now expects Brent to average $86/Bbl in 3Q26, down from $104/Bbl previously, and $80/Bbl in 4Q26 versus its prior forecast of $98/Bbl
  • "The market has rebalanced through a meaningfully different mix of demand losses and inventory withdrawals than we initially assumed," analyst Natasha Kaneva said
• The EIA reported total US crude inventories fell by 6.1 MMBbls last week, while stocks at Cushing declined by 1.1 MMBbls to their lowest weekly level since October 2014

Natural gas trades higher, as Northeast and Midwest continue to warm

• Weather forecasts warmed again today, with the Northeast and Midwest driving much of the gains in the two-week forecast
• • Temperatures are forecast to be well above the ten-year average for the first week of July
• The EIA will release its weekly inventory report this morning, with a median expectation of a 69 Bcf injection, according to the Bloomberg survey
• • The five-year average injection for the corresponding week is 64 Bcf, meaning a 69 Bcf injection would see the storage surplus expand this week

FERC approves Golden Pass Train 2 commissioning

• Golden Pass LNG recently filed a request with federal regulators to begin commissioning the second train of the three-train export plant, with authorization being granted yesterday
• This keeps Train 2 on track for a startup in Q4 2026, which project developers have been guiding for
• Train 1 is still below its full capacity of 790 MMcf/d, but has been reaching new highs this week