First Look - OPEC+ close to delaying supply increase | DT Midstream completes LEAP phase 3 expansion early

• WTI prices have slumped more than $6 over the past week, falling to the lowest level since last December
• Options market implied volatility has risen sharply amid the recent selloff

• Key members of the group likely won’t go ahead with the planned production increase of 180 MBbl/d in October, according to OPEC delegates
• They are also considering postponing other supply increases later this year
• This is due to the recent weakness in oil prices, with WTI trading below $70/Bbl and Brent near $73/Bbl
  • Lately, weak Chinese consumption has outweighed the impacts of the Libyan supply stoppage
• However, by leaving supply offline, OPEC could risk further eroding their market share

• Prompt gas was 4.1c higher to $2.186/MMBtu (As of 7:45 AM)
• Winter ‘24/’25 strip is up 4.3c to $3.044, and the Summer ’25 strip is up 3.4c to $3.069
• Today's European Ensemble shifted warmer, with Lower 48 temps increasing by +7.9 F, led by significant gains in the Northeast (+10.4) and Midwest (+19.8), while forecasting a return to moderate temps late next week (Criterion)

• DT Midstream completed the LEAP Phase 3 Expansion ahead of schedule and within budget, increasing capacity to 1.9 Bcf/d
• They are now evaluating a Phase 4 expansion for 2025-2026, targeting an additional 0.2-0.4 Bcf/d, which could ultimately grow the system to a total capacity of 4 Bcf/d
• However, LEAP deliveries to the Gillis Hub have recently declined to 1.15-1.20 Bcf/d, their lowest level since early July
• Additionally, DT is advancing its East Texas Gathering expansion with new gathering agreements, aiming to complete the project by 2Q25 and ramp up to 400 MMcf/d over two years

Chesapeake CEO sees datacenter buildout as a benefit for Marcellus Shale drillers (S&P Global)

• Appalachia's natural gas producers are well-positioned to meet growing gas demand from northeastern U.S. datacenter construction, CEO Dell'Osso said on Sept 4 at the Barclays CEO Energy-Power conference
• Dell'Osso noted that datacenter projects need fiber, power lines, and gas pipelines, with fiber being easiest to build, making proximity to population centers like New York and Boston important
• Chesapeake, with nearly 4 Bcf/d gross production in Northeast PA, shares this prime acreage with Coterra Energy and Southwestern Energy, with a pending merger with Southwestern expected by Q4 2024