- Crude rebounds as Hormuz risks temper post-election selloff
- The WTI prompt-month contract rose $1.39 to $89.51/Bbl Thursday morning (7:30 AM CT)
- Crude recovered a portion of Wednesday’s steep decline as fresh shipping incidents underscored that risks around the Strait of Hormuz remain elevated
- UKMTO reported that a tanker was struck by two unidentified projectiles north of Qatar late Wednesday
- Markets have substantially reduced the risk of another major escalation following the Democrats’ victory in the US midterm elections
- Once Democrats take control of both chambers of Congress in January, they will have greater scope to pressure the administration and scrutinize its military operations
- However, Trump retains considerable freedom over foreign policy and the US and Iran have yet to reach an agreement, leaving open the possibility that geopolitical risk could quickly return to crude
- JPMorgan estimates that the global oil market recorded a surplus of 1.4 MMBbl/d in October as recovering Middle Eastern exports, rising production elsewhere and weaker demand pushed supply above consumption
- The bank estimates that Latin America is supplying approximately 1.5 MMBbl/d more crude than a year ago, led by Brazil, Venezuela, Guyana and Argentina
Daily First Look
Daily briefThomas Liardon
Crude Rebounds as Hormuz Risks Temper Post-Election Selloff; Gas Flat as Cooling in Forecast Dents Heat Story
Today’s hedge levels
Prices as of 4:59 AM CT
NYMEX WTI$/Bbl
Prompt · Nov-26
$88.68
down 7.10vs. settle
Nov–Dec 2026$87.46
Nov–Dec CMAdown 6.59
| Cap | $93.18 | $96.21 | $99.39 |
|---|---|---|---|
| Floor | $82.50 | $80.00 | $77.50 |
Cal 2027$78.34
Jan–Dec CMAdown 5.30
| Cap | $82.33 | $85.39 | $88.58 |
|---|---|---|---|
| Floor | $75.00 | $72.50 | $70.00 |
Cal 2028$70.52
Jan–Dec CMAdown 2.90
| Cap | $73.22 | $75.49 | $77.79 |
|---|---|---|---|
| Floor | $67.50 | $65.00 | $62.50 |
NYMEX Henry Hub$/MMBtu
Prompt · Dec-26
$2.959
up 0.064vs. settle
Cal 2027$2.892
Jan–Decup 0.004
| Cap | $3.01 | $3.17 | $3.33 |
|---|---|---|---|
| Floor | $2.80 | $2.70 | $2.60 |
Cal 2028$3.512
Jan–Decdown 0.010
| Cap | $3.68 | $3.86 | $4.04 |
|---|---|---|---|
| Floor | $3.40 | $3.30 | $3.20 |
Dec 2026 - Mar 2027$2.921
Dec–Marup 0.033
| Cap | $3.11 | $3.28 | $3.48 |
|---|---|---|---|
| Floor | $2.80 | $2.70 | $2.60 |
Indicative swap levels and costless collars; each column is one cap / floor pair. Talk to your AEGIS advisor for firm pricing.
- Gas flat as warming in forecast dents overall heat story
- Natural gas is down -0.4c to $2.955/MMBtu (As of 07:30 AM CDT)
- Production dropped 400 MMcf/d this morning to 108.5 Bcf/d, settling into a range that’s around 3 Bcf/d lower than last month and 1 Bcf/d lower than last year
- Lower-48 dry gas production is down 4.47 Bcf/d since October 31, led by curtailments in Appalachia due to mild weather demand
- Rescom demand picked up this morning by 2.2 Bcf/d to 17.7 Bcf/d (Criterion)
- Weekend temperatures are expected to fall towards the 10-yr average, creating a brief stint of near-normal heating demand
- After the drop in temperatures this weekend, average temperatures are expected to gain back from around 50°F to around 54-57°F over the following week and a half
- Forecast models lost notable heat this morning, the most prominent forecast shift this week
- Overall Lower-48 average temperatures dropped a total of 6.2°F over the forecast period, led by losses east of the Rockies
- This cooling is associated to a roughly 12.5 Bcf gain in forecasted weather driven demand in total
- The EIA reports its weekly natural gas storage report today, with the median Bloomberg estimate sitting at a 78 Bcf build for the week ending October 30
- If the build falls in line with estimates, it will be 17 Bcf higher than the 5-year average of 61 Bcf
- This would be the second week in a row of an expanding surplus, as mild shoulder season weather reverses the late summer trend of tightening
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