Crude Edges Higher as Saudi Supply Uncertainty Persists; Gas Slips as Power Demand Gets Sucked from the Forecast

Crude edges higher as Saudi supply uncertainty persists

• The WTI prompt-month contract rose $0.24 to $102.15/Bbl Friday morning (7:30 AM CT)
• Saudi Arabia is working to restore its damaged East-West pipeline to the Red Sea coast and aims to return roughly half of its capacity within days
• • Despite the expected partial restart, Aramco has informed some European refining customers that they will not receive Saudi crude next month following the pipeline attacks
• In an effort to ease pressure on oil markets, Beijing privately asked Iran to help restrain Houthi militants in Yemen following an appeal from Saudi Arabia, according to Reuters
• JPMorgan analysts said the duration of the Iran war and its effect on regional oil flows have become increasingly difficult to forecast
• • Several politically sensitive thresholds have already been reached, including crude above $100/Bbl and US gasoline prices approaching $5/gal, further complicating the path toward de-escalation
  • “With no clear signals from either the US or Iran that they are prepared to de-escalate, and absent a diplomatic breakthrough on Sept. 24, when President Trump and President Xi are set to meet in DC, the assumption that the disruption is temporary is becoming increasingly difficult to sustain,” the analysts wrote
• The balance-of-2026 strip is trading at $92.95/Bbl, while the Cal 2027 strip is trading at $76.38/Bbl (7:30 AM CT)

Gas Slips as more power demand get sucked from the forecast

• Natural gas is up 1.6c to $2.917/MMBtu (As of 07:30 AM CDT)
• CDDs continue to taper as the seasonal transition advances
• • They are falling from around 12-14 earlier this month to just 3-4 per day by September 22
• The forecast is running 1-4°F under the 10 year normal through the 6-15 day period (Criterion)
• • CWG notes that despite cooling patterns coming, September is still projected near 259 CDDs, the second warmest since 2000

Commonwealth LNG proposes expansion of Louisiana export terminal (S&P)

• The expansion would add five Liquefaction trains totaling around 1 bcf/d of feedgas demand
• Company executives said they would target an in-service date in the early 2030s