Crude Holds Near Flat as Gulf Exports Recover; Gas Extends Losses as Warm Start to November Holds

Crude holds near flat as Gulf exports recover

• The WTI prompt-month contract fell $0.04 to $97.78/Bbl Wednesday morning (7:30 AM CT)
• US Secretary of State Marco Rubio said Tuesday that oil volumes moving through the Strait of Hormuz were close to prewar levels
• • Kpler estimates that total exports from Gulf producers excluding Iran averaged 24.6 MMBbl/d during the week ending October 18, above the 23.3 MMBbl/d prewar average
  • However, shipments directly through Hormuz remained more than one-third below prewar levels, with alternative pipelines, Red Sea loadings and STS transfers supporting the broader recovery
• Attacks on regional shipping continued, with UKMTO reporting separate incidents near Iraq and Oman
• • A tanker was struck by an unidentified projectile southeast of Al Faw, Iraq, on Tuesday, while another tanker was hit west of Bukha, Oman, on Wednesday
• Morgan Stanley expects oil-product markets to remain tight through mid-2027, even if current war-related disruptions ease, as refiners face an unusually heavy maintenance schedule
• • Maintenance-related outages are expected to increase by 3.4 MMBbl/d through 2Q27 as refineries complete work previously postponed to take advantage of strong margins
• Morgan Stanley also raised its Dated Brent forecasts for the final three quarters of 2027
• • The bank lifted its 2Q27 forecast by $5/Bbl to $95/Bbl and raised its 3Q27 and 4Q27 forecasts by $10/Bbl each to $90/Bbl and $85/Bbl, respectively
  • The bank said the unresolved conflicts in the Middle East and Ukraine increase the likelihood that supply uncertainty persists for longer

Gas extends losses as warm start to November holds

• Natural gas is down -10.4c to $2.859/MMBtu (As of 07:30 AM CDT)
• There was little change to the forecasted temperatures this morning, with the overall Lower-48 gaining just 4.8°F over the forecast range
• • The South Central lost some heat, but was more than offset by the rest of the country
• Production gained around 800 MMcf/d in the late cycle yesterday, but lost most of those gains again this morning to be back below 110 Bcf/d

Golden Pass train 1 sets another fresh record

• Golden Pass nominated for 825 MMcf/d this morning, continuing progress towards full utilization of the liquefaction train
• Total US LNG rebounded 957 MMcf/d this morning to 20.78 Bcf/d, close to recent highs