The disruptions cause a blockage of output beyond OPEC+, and the group could also create problems this weekend. It is expected that OPEC+ will keep its October production policy unchanged, after completing the phased removal of 1.65 million barrels per day of its voluntary cuts. There, however, remains a gap in oil supply due to geopolitical disruptions.
The U.S. appears to be leaning much tighter in its crude oil balance. EIA data showed crude stocks drew 4.5 million barrels, to 424.5 million barrels, far beyond the estimated 1.1 million barrel draw.
For natural gas (NG), fundamentals have been supported as LNG feed gas demand recovers following Tropical Storm Edouard, while significantly warmer-than-usual weather throughout the continental U.S. is expected to continue through mid-September. However, record production coupled with above average stock levels provides important counterbalance. The EIA reports U.S. dry gas production reached an all-time high in June while LNG exports for the first half of 2022 were 23% higher compared to the same period the previous year.
Fundamental bias: USOIL bullish, UKOil bullish, Natural Gas moderately bullish, with Middle East escalation and LNG flows the dominant near-term catalysts.
Natural Gas Technical Analysis: NG Holds $2.88–$2.90 Support as $3.03 Remains the Next Bullish Trigger