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First Look - Gas climbs to highest since July, driven by near-term heat | Gulf of Mexico operators restoring production

Oil is up slightly as markets await Federal Reserve rate-cut decision
- The Federal Reserve begins today with an announcement tomorrow on an expected interest rate cut
  - A 25-50bps cut is broadly expected by the market
Gulf of Mexico operators restoring production (Argus)
- As impacts from Hurricane Francine fade, producers in the US Gulf are returning operations to normal and bringing back oil and gas production
- Just 12% of oil output in the US Gulf of Mexico was still shut-in on Monday, which is about 213 MBbl/d
- This is down from 732 MBbl/d, which was shut-in as of Friday
- 24 platforms were still shut in, compared with 171 last week
Iraq says cost dispute is delaying the restart of key pipeline (BBG)
- The restart of the Iraq-Kurdistan pipeline, which has been shut for over a year, is being delayed by disagreements over payments to international oil companies
- The pipeline is capable of shipping about 500 MBbl/d from Iraq to Turkey
- Without the pipeline, producers in Iraq have been selling crude locally, which has created issues with Iraq’s OPEC quotas

Gas climbs to highest since July driven by heat in Texas and elsewhere
- Prompt gas was 2.9c higher to $2.402/MMBtu (As of 7:47 AM)
- Winter ‘24/’25 strip is up 1.2c to $3.056, and the Summer ’25 strip is down 0.2c to $3.041
- Today's European Ensemble showed Lower 48 temps remaining flat, with warmer 1-5 day forecasts offset by cooler 6-15 day temps, following a similar pattern to yesterday's model and the 10-year normal (Criterion)
Permian Producers Eye Natural Gas Price Relief With Infrastructure Projects Heading Into Mexico (Bloomberg)
- Three major pipeline projects with a total capacity of 7.3 Bcf/d could provide much-needed capacity relief for Permian producers, with expected online dates by 2027
- Current takeaway capacity constraints force Permian producers to sell natural gas at steep discounts, with the Waha hub seeing prices as low as negative $6.41 in August due to excess supply
- The 2.5 Bcf/d Matterhorn Express pipeline began initial flows this month, with other major pipelines like the 2 Bcf/d Apex and 2.5 Bcf/d Blackcomb expected to enter service by 2026
- The 2.8 Bcf/d Saguaro Connector Pipeline, contingent on the development of an LNG export plant in Mexico, could provide additional export capacity between 2027 and 2028