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First Look - Oil Plunges More Than $3 as Israel Reportedly Won't Target Iran's Nuclear, Energy Sites

Oil is down more than $3/Bbl as Israel says they will not strike Iranian oil facilities
- WTI prices fell nearly 6% to below $70/Bbl before paring some losses following an announcement by China for an additional meeting on possible stimulus
Israel says they will not strike Iranian oil infrastructure (BBG)
- The US has been pushing for a more limited strike on Iran that would avoid disrupting crude flows in the region
- A report in the Washington Post stated that Israel has agreed to US requests and limit their response to military targets
- Crude prices fell significantly following this report as fears of a supply disruption have supported prices lately
TotalEnergies refining margins in Europe hit a three-year low (S&P)
- TotalEnergies reports a significant decline in European refining margins due to falling oil product prices, with economic headwinds affecting consumption and refining business outlooks
- European utilization rates are expected to ease to 82% over October and November from 83% in September

Gas trades higher as early-season heating demand supported prices in the near term
- Prompt gas was 1.9c higher to $2.513/MMBtu (As of 8:19 AM)
- Winter ‘24/’25 strip is down 5.3c to $2.919, and the Summer ’25 strip is down 3.8c to $3.042
- Today's European Ensemble was slightly warmer than yesterday's, with Lower 48 temps up by 2 F, showing continued consistency and a shift to near/slightly above normal temps by late October (Criterion)
New Permian gas pipe eases pressure, but Kinder Morgan's maintenance hits November Waha basis (AEGIS)
- Waha basis improved significantly in late Q3 with the new 2.5 Bcf/d Matterhorn pipeline, reducing pressure on Permian gas takeaway capacity, which had led to negative Waha prices for nearly 40% of 2024
- Prompt-month Waha basis shifted from -$3.00/MMbtu to -$1.00/MMbtu after Matterhorn's startup and contract roll to November
- Kinder Morgan’s 15-day maintenance on its PHP, reducing capacity by 1.2 Bcf/d, and a five-day outage on GCX in late October are expected to briefly impact Waha prices
- Matterhorn pipeline is currently flowing at least 650 MMcf/d with projections to fill by April 2025, potentially shifting gas flows back to northern corridors after that