Crude Declines as Saudi Arabia Prepares Partial Pipeline Restart; Gas Flat as Weather Forecasts turn Cooler

Crude declines as Saudi Arabia prepares partial pipeline restart

• The WTI prompt-month contract fell $2.95 to $99.48/Bbl Thursday morning (7:30 AM CT)
• Saudi Arabia is working to restore roughly half of the capacity on its key East-West pipeline within days after shutting the route last week following drone strikes
• Upside risks remain as the US-Iran war continues to restrict flows through the Strait of Hormuz and Yemen’s Houthis advance toward the critical Bab el-Mandeb Strait in the Red Sea
• The Federal Reserve raised interest rates by 25 basis points on Wednesday, while its latest projections pointed to another increase in 2026
• • Crude prices had a muted reaction to the Fed decision, though sustained global monetary tightening could weigh on economic growth and oil demand in 2027
• Domestically, US commercial crude inventories declined by 0.6 MMBbl for the week ending September 11, compared with market expectations for a 1.47 MMBbl build

Gas flat as weather forecasts turns cooler, offsetting production curtailments

• Natural gas is down -1.7c to $2.874/MMBtu (As of 07:45 AM CDT)
• L48 lost 13.8°F cumulatively across the forecast period this morning, with losses centered in the Midwest and Northeast regions
• • There was consistent 2-6°F lost daily in the Midwest region on days 5-12 of the forecast along major population centers in the region (CWG)
  • Low temperatures are expected to fall below 50°F most days across some population centers, and below 60 across most others in the Midwest and Northeast regions
  • • These temperatures should elevate rescom demand as we knock on the door of shoulder season
  • Average temperatures are expected to fall below 70°F as October starts, in line with the 10-year average

Bloomberg releases its weekly storage report today, with Bloomberg reporting median expectations of a 48 Bcf injection

Southeast premiums are unwinding

• Transco Z5 basis prompt has fallen from $0.2325/MMbtu on last Wednesdays settle to $0.1375/MMbtu yesterday