First Look - OPEC+ working on supply policy that may extend into 2025

• Oil is trading higher, around $78.30, heading for a modest weekly loss (As of 7:58 AM)
  • Yesterday, the EIA reported a 4.2 MMBbl draw from US inventories, putting total stocks about 4% below the five-year average
  • Prompt ICE Brent has weakened into contango for the first time since January
• OPEC+ working on supply policy that may extend into 2025 (BBG)
  • OPEC is currently in informal talks aimed at finalizing their supply policy this weekend, according to OPEC delegates
  • The next meeting is slated for this Sunday, with Saudi Arabia and its partners discussing whether to extend the roughly 2 MMBbl/d production cut into the second half of the year
  • In addition to the official OPEC cuts, eight members have been reducing supply in voluntary production cuts
  • Discussions about output levels in 2025 are complicated by an external review of OPEC member's production capacity, due at the end of June
    • Kazakhstan and the UAE may have the ability to produce more next year

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Interest Rate Charts and Tables

• Natural gas prices trade lower amid signs of returning production volumes and looming storage surplus (As of 7:58 AM)
  • July ’24 Henry Hub is down 3c this morning to trade around $2.542/MMBtu
  • The Summer ’24 strip is down 1.5c to $2.633 and Winter ‘24/’25 strip is down 0.3c to $3.441
  • Today’s Euro Ensemble indicates slight cooling in the Northeast, Midwest, and Southeast, with stable overall conditions and an expected mid-week heat peak to boost power demand (Criterion)
• LNG peak storage projects gain ground in several states, not just from gas utilities (S&P Global)
  • Several states are developing LNG peak storage projects, driven by natural and electric utilities to secure gas supplies while facing state and federal regulatory processes
  • Dominion Energy is developing a facility in Virginia with a 2 Bcf storage capacity, aiming for service in 2027. Meanwhile, Eastern Shore Natural Gas is seeking approval for a 475,000-gallon LNG storage project in Maryland, targeting Q3 2025
  • The $100 million NEC facility in Charlton, Massachusetts, began service in Q1 2024, reducing reliance on imported LNG with 2 Bcf storage capacity
  • Additionally, We Energies in Wisconsin filed an application for a new 2 Bcf LNG storage facility in Oak Creek, while New Mexico Gas had its 1 Bcf project rejected by state regulators