First Look - Liberty CEO sees limited near-term upstream natural gas growth, but bullish on AI, exports

• Oil is trading higher, reversing some losses from yesterday
  • WTI is up about 79c to $77.75/Bbl after falling nearly $1.50 yesterday
  • The API is forecasting another withdrawal from US crude inventories ahead of the official EIA release today
    • This would be the fourth consecutive weekly decline in inventories
• Weak refinery demand weighing on Chinese crude imports (Argus)
  • In the first half of 2024, China’s crude imports fell, driven by lower demand from refineries and weak crack spreads
  • Imports averaged 11.18 MMBbl/d, down by 275 MBbl/d year-over-year
  • Imports from the Middle East fell by the most, while Russian supply remained relatively stable
  • China is one of the largest crude consumers, and weak demand in China can weigh on global oil prices

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Interest Rate Charts and Tables

• Natural gas prices trade struggle to hold gains amid concerns of storage surplus and cooler weather
  • Prompt gas was 7c lower to $2.2117/MMBtu (As of 8:08 AM)
  • The Summer ’24 strip is down 4.0c to $2.189 and Winter ‘24/’25 strip is down 4.1c to $3.205
  • Today's European Ensemble shows cooling across the Lower 48 except in the Southeast and South-Central regions, but above-normal temperatures are expected to return by mid-next week and persist through early August. (Criterion)
• Liberty CEO sees limited near-term upstream natural gas growth, but bullish on AI, exports (NGI)
  • Liberty Energy CEO Chris Wright sees limited near-term upstream natural gas growth but is optimistic about AI and U.S. manufacturing increasing demand for natural gas
  • Exports to Mexico and new LNG facilities are expected to drive higher natural gas demand and prices in the future
  • Despite recent natural gas price fluctuations, overall activity is currently low, and significant growth isn't expected until at least 2025, added Wright
• Williams plans swift 8 Bcf expansion of Utah natural gas storage facility (S&P Global)
  • MountainWest Pipeline, a Williams subsidiary, intends to expand the Clay Basin Storage Reservoir in Utah by nearly 8 Bcf by Sept., pending FERC authorization
  • The expansion will increase the facility's total storage capacity to 128 Bcf and working gas capacity to 61.8 Bcf, maintaining cushion gas at 66.2 Bcf
  • No new facilities are required for this expansion, and the site will operate at a higher pressure of 2,700 psi, up from 2,536 psi
  • Regional natural gas inventories are high, with Mountain region stocks at 248 Bcf as of July 12, nearing record levels