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First Look - IEA sees major oil surplus this decade

Oil is trading higher by more than $1, extending gains from yesterday (As of 8:25 AM)
- Strong industrial data has helped support crude prices while inflation showed signs of cooling, which could support interest rate cuts this year
- Yesterday the EIA released their short-term outlook, leaving their production and consumption forecasts relatively unchanged
IEA sees major oil surplus this decade, on demand peak (BBG)
- The International Energy Agency sees global oil demand peaking, leading to a surplus in crude this decade
- The agency forecasts global consumption to level off at 105.6 MMBbl/d in 2029, driven by increased EV adoption and fuel efficiency
- This is in sharp contrast to OPEC’s view, which shows global oil demand continues to rise past 2030

Natural gas was trading a few cents lower Wednesday early morning trading, paring some of Tuesday’s large gain
- The July contract remains above $3.00/MMBtu as the back half of June weather forecasts push the national average into the upper 70’s
- Lower 48 dry gas production remains below 98 Bcf/d according to early morning nominations, near year-to-date lows ex-freeze offs (Criterion)
The EIA released its Short-Term Energy Outlook for June yesterday, decreasing their forecast for dry gas production
- The US agency decreased their 2024 and 2025 forecasts to 102.1 Bcf/d and 104.40 Bcf/d, respectively, down about 0.8 Bcf/d for 2024 and 0.5 Bcf/d for 2025
- Natural gas demand estimates were bumped slightly higher. This year’s demand is estimated to average 89.40 Bcf/d and 89.90 Bcf/d for 2025
Observed flows on MVP via Equitrans, TCO, and Transco remain unchanged (Criterion)
- FERC approved MVP’s request to begin commercial operation this week, as mentioned yesterday
- Gas flows continue to come only from Equitrans
- Volumes on MVP are measured from the point of view of other pipes so far, as MVP’s bulletin board is still not reporting actual capacity yet, according to Criterion Research
- Meanwhile, Eastern Gas South (Dom S) basis for July was near an eight-month low of -$0.98 MMcf/d