Crude Rises as IEA raises Deficit Estimates; Forecast Warming and Feedgas Rebound Lead Gas Higher

Crude rises as IEA raises deficit estimates

• The prompt-month WTI contract rose $0.49 to $83.69/Bbl Wednesday morning (7:30 AM CT)
• The IEA now expects the global oil market to run a 1.8 MMBbl/d deficit in 3Q26 as renewed US-Iran hostilities and disruptions to regional shipping constrain supply
• Despite the tighter near-term outlook, the agency still sees balances shifting into a sizable surplus in 2027, with global supply projected to exceed consumption by 4.6 MMBbl/d
• President Trump said the US has “total control” over the Strait of Hormuz, although visible tanker traffic through the waterway remains limited
• • Some crude continues to leave the Persian Gulf, including aboard vessels operating with transponders switched off, while Energy Secretary Chris Wright said nearly 9 MMBbl/d is moving through the strait with US military assistance
  • An Abu Dhabi National Oil Co. spokesperson said Iraqi crude exports have recently increased to roughly 2 MMBbl/d in August, above earlier estimates of 1.5-1.7 MMBbl/d, supported by increased shuttling activity
• Domestically, the American Petroleum Institute reported a 9.1 MMBbl build in US crude inventories last week, with official government data scheduled for release later Wednesday

Forecasted temperature warming and feedgas recovery lead gas higher

• Natural gas is up 5.5c to $2.822/MMBtu (As of 07:30 AM CDT)
• The L48 gained 3.2°F of heat over the forecast period, with minor improvements across the forecast period east of the Rockies (Criterion)
• Feedgas demand returned to form after the drop yesterday, up over 1 Bcf/d to 18.6 Bcf/d
• • Sabine pass lead the rebound higher, gaining back 700 MMcf/d
• Creole Trail outage is flagged for August 25-28 that will trim roughly 150 MMcf/d from Sabine Pass (Criterion)
• Freeport is slated for a full return to normal rates in late August

US Battery storage capacity grows 70% annually over last three years (EIA, S&P)

• During the first half of 2026 operators added 8.3 GW of battery storage capacity
• 54 GW of storage capacity are expected to come online by the end of 2028
• • More battery storage capacity will compete with natural gas in the power stack during evening hours