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First Look - Oil heads for a first weekly gain in three weeks | Power supply to Freeport LNG terminal falls by about a third

Oil prices continue to recover, with WTI heading for the first weekly gain in three weeks
- WTI is trading near $70/Bbl this morning, compared to the lowest price seen this week of about $65/Bbl
- Some of this recovery may be driven by an unwinding of extremely bearish speculator positioning
- US supply output fell significantly this week as Hurricane Francine forced offshore production platforms to evacuate
- The Federal Reserve is expected to begin cutting interest rates at its meeting next week, which should be supportive of oil prices
Libyan supply falls further as central bank standoff continues (BBG)
- Crude exports from Libya continued to fall as UN-led talks failed to reach a conclusion regarding the country’s central bank
- Libya exported about 314 MBbl/d over the past week, down from 468 MBbl/d on the first five days of the month
- When operations are normal, Libya can export more than 1 MMBbl/d
- The loss of supply has been outweighed by macro concerns and slumping Chinese demand

Gas trades higher and heads for a third straight weekly gain amid lower production
- Prompt gas was 3.8c higher to $2.395/MMBtu (As of 8:15 AM)
- Winter ‘24/’25 strip is up 1.6c to $3.067, and the Summer ’25 strip is up 1.0c to $3.065
- Today's European showed limited changes, with the West trending warmer while the Lower 48 pattern remains stable, expecting steady temperatures over the next two weeks. (Criterion)
Power supply to Freeport LNG terminal falls by about a third (Bloomberg)
- Power supply to Freeport LNG in Texas dropped on Friday morning, following a brief dip earlier in the week
- Data indicates one of the three trains at the facility may be down, according to sources familiar with the situation
- The drop in power was confirmed through power-meter data viewed by Bloomberg
Mexico’s reliance on U.S. natural gas unimpeded amid mounting political risk (NGI)
- Mexico's pipeline imports from the U.S. remain strong at 7-7.4 Bcf/d in Sept., driven by high gas demand for power generation
- Meanwhile, US output dipped below 100 Bcf/d, partly due to Hurricane Francine, but exports to Mexico continued, especially from West Texas at 2.05 Bcf/d
- Political uncertainty persists in Mexico as constitutional reforms may impact investor confidence and energy projects; recent Cenagas pipeline capacity auctions saw minimal interest
- Mexican natural gas cash prices fluctuated, with Los Ramones at $2.385/MMBtu and Mérida on the Yucatán Peninsula at $3.893/MMBtu on Wednesday