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First Look - Oil declines nearly $2 with focus on OPEC+ production hike plan for fourth quarter

Oil is trading lower today and heading for a weekly loss despite supply concerns
- Ongoing concerns over Chinese demand have countered the shutdown of Libyan crude production this week
- Data released on Thursday showed Iraqi production surpassed the country’s OPEC quota
OPEC expected to proceed with output increase (Reuters)
- According to sources within OPEC, the group is expected to proceed with its planned production increase starting in October
- A slowdown in demand growth, notably in China, has weighed on oil prices and prompted some analysts to doubt whether OPEC will follow through with its plan
- The sources cited the loss of Libyan supply, and the possibility of an interest rate cut by the Federal Reserve as supporting factors for oil prices

Natural gas trades modestly higher even as forecasts indicate a cool start to September
- Prompt gas was 0.1c higher to $2.138 /MMBtu (As of 8:23 AM)
- Winter ‘24/’25 strip is down 2.1c to $3.008, and the Summer ’25 strip is down 2.2c to $3.039
- Futures gained support this week from a bullish EIA storage report showing a 35 Bcf injection, with storage at 3,334 Bcf, reducing the surplus to 12% above the five-year average
- Today's European Ensemble showed a net +1.5 F gain in Lower 48 temps, mainly in the 11-15 day period, pushing temperatures above the 10-year normal late in that range (Criterion)
Biden administration pitches plan to open more federal land to solar farms (S&P Global)
- The US Interior Department proposed expanding utility-scale solar development to 31M acres across 11 western states, updating the Obama-era Western Solar Plan from 22M acres
- The updated plan includes five additional states (Idaho, Montana, Oregon, Washington, Wyoming) and directs projects closer to transmission corridors and previously disturbed areas
- The plan, set for finalization in Dec, aims to streamline solar project permitting, addressing bottlenecks in the US solar industry
- The proposal follows the administration permitting over 25 GW of clean energy on public lands earlier this year