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First Look - Oil is slightly lower, following yesterday's decline of more than $2 | Antony Blinken says Israel accepts ceasefire

Oil is slightly lower, following yesterday’s decline of more than $2/Bbl
- Ongoing Middle East ceasefire talks and concerning economic data from China have weighed on prices
Record Chinese crude imports from Malaysia point to higher Iran flows (BBG)
- China imported a record amount of oil from Malaysia last month, which is often used as a hub for ship-to-ship transfers to mask the country of origin
- Officially, China has not purchased any Iranian crude since June 2022
- Iranian-sourced oil is often the cheapest option for Chinese buyers, with Iranian Light last offered at a discount of $6/Bbl to ICE Brent, compared with a $1/Bbl discount in Russian crude
- Smaller independent refineries in China’s Shandong Province are the largest consumers of “Malaysian” crude, accounting for 70% of the volumes
Antony Blinken says Israel accepts ceasefire (BBG)
- The US Secretary of State said that Israel has agreed to a ceasefire framework, but now Hamas must also agree
- The US and other nations have been attempting to mediate a ceasefire between Israel and Hamas to avoid a further escalation of the conflict
- So far, no crude flows have been disrupted in the conflict, but tensions have led to an increase in geopolitical risk premium

Gas trades a few cents higher as the market weighs mixed weather demand, a production dip, and ongoing supply overhang
- Prompt gas was 3.4c higher to $2.269/MMBtu (As of 7:45 AM)
- Winter ‘24/’25 strip is down 1.4c to $3.149 and the Summer ’25 strip is down 1.9c to $3.098
- Today's European Ensemble showed a moderate cooling, especially in the Northeast and Rockies, while next week sees a shift to warmer temperatures with late August hovering around the 10-year normal (Criterion)
Grid challenges make dedicated gas generation best option for data centers, says Kinder Morgan (S&P)
- Kinder Morgan anticipates 3-6 Bcf/d of additional natural gas demand from data centers by 2030, driven by the need for reliable power
- Utilities are struggling to meet demand from hyperscalers like Google and Meta due to scaling challenges, according to CCO Brown
- Regulatory issues and the complexity of grid reliance make gas-fired power stations a compelling solution, with Brown emphasizing, “It makes a heck of a lot more sense… to associate a power plant next to a data center coming directly off a pipeline”