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First Look - Oil is trading higher after falling to a nearly two-week low yesterday

Oil is trading higher after falling to a nearly two-week low yesterday
- Crude prices have steadied after several days of losses, which saw concerns over Chinese demand outweigh fears of an escalation of conflict in the Middle East
- The API is forecasting a crude storage build of 347 MBbls, ahead of the official EIA data release today
US oil export gains slow amid tepid global demand (Reuters)
- US crude exports are expected to plateau in 2024 after several years of strong growth. Due to slowing production growth and sluggish global demand
- US crude production is set to grow 2.3% as producers continue to focus on limiting growth and increasing shareholder returns
- Global crude demand has slowed this year, driven by China, where a protracted property downturn has led to economic worries
- Meanwhile, the expansion of Canada’s Transmountain pipeline has boosted imports of Canadian crude to the US West Coast, with more oil being shipped on tankers from Vancouver

Gas trades modestly lower, maintaining some of Monday’s strong gains, supported by hotter near-term weather forecasts
- Prompt gas was 0.3c lower to $2.195/MMBtu (As of 7:45 AM)
- Winter ‘24/’25 strip is down 0.1c to $3.157 and the Summer ’25 strip is up 0.8c to $3.152
- Today's European Ensemble showed mixed temperatures with overall limited change in the Lower 48, but a shift to warmer temperatures is expected next week (Criterion)
US added 20.2 GW of power generation capacity in 1H 2024, 42.6 GW expected in 2H, says EIA (S&P)
- The US added 20.2 GW of power generation capacity in 1H 2024, 21% more than 1H 2023, with 42.6 GW projected for 2H, largely driven by solar, battery storage, and wind.
- Solar power led the additions with 12 GW, accounting for 59% of the total, driven by significant projects in Texas and Florida; battery storage and wind contributed 4.2 GW (21%) and 2.5 GW (12%)
- Power plant retirements slowed, with 5.1 GW retired in 1H 2024 compared to 9.2 GW in 1H 2023; gas and coal-fired plants accounted for the majority, but some are kept operational for grid reliability
- 2H 2024 plans include 42.6 GW of new capacity, with solar expected to dominate at nearly 60% (25 GW); battery storage and wind are set to add 10.8 GW and 4.6 GW