Crude Slides as Europe Weighs Coordinated Stock Release

Crude slides as Europe weighs coordinated stock release

The WTI prompt-month contract fell $3.52 to $89.35/Bbl Friday morning (7:30 AM CT)
Crude moved lower as European officials considered releasing emergency diesel reserves in response to mounting pressure from Washington
- The US asked the European Union to release as much as 120 MMBbl of diesel over the next six months as an alternative to a potential US diesel export ban
- During emergency talks Friday, European officials discussed a proposal to release 50 MMBbl of diesel alongside a separate 50 MMBbl crude release from IEA members
Additional supply relief is emerging from Saudi Arabia, where flows through the 7 MMBbl/d East-West pipeline have recovered to more than 80% of capacity, according to Bloomberg
- Saudi Aramco is pumping nearly 6 MMBbl/d through the pipeline, with roughly 4.5 MMBbl/d available for exports
However, geopolitical risks remain elevated as the Pentagon sends a third aircraft carrier and roughly 9,000 additional military personnel to the Middle East amid renewed tensions with Iran

Gas edges lower on mild forecast

Natural gas is down -2.7c to $2.94/MMBtu (As of 07:30 AM CDT)

Modeled demand lost 13 Bcf/d this morning, with temperatures in the Northeast and Western regions warming in the back half of the forecast

The L48 is still expected to enter HDDs on October 14

Feedgas gained back to 18.5 Bcf/d this morning led by recovery at Sabine Pass (Criterion)

Cove point remains down for maintenance, which is also acting as a further catalyst against Northeastern Basis

The EIA reported a 64 Bcf injection into storage yesterday, which came slightly above analyst’s expectations

The surplus to the 5 year average is now only 79 Bcf, losing nearly 120 Bcf in less than two months
Once estimated around 4 tcf, storage expectations are now in the range of 3.8-3.9 tcf