First Look - Goldman Sachs sees limited upside for crude prices in 2025

• The API forecasts a 1.6 MMBbl build in US crude inventories ahead of the official data release this morning
• US Secretary of State Antony Blinken said the Israeli killing of Yahya Sinwar opens new possibilities for resolving the conflict

• Goldman Sachs forecasts limited upside for oil prices in 2025 due to sufficient supply and potential geopolitical risks, predicting a price range of $70-85/Bbl
• Downside price risks from high spare capacity and potential trade tariffs outweigh moderate upside risks
• Goldman analysts note unresolved Middle East conflicts could increase war risk premiums and oil prices

China raises crude import quota for private refiners

• China increased the 2025 crude import quota for private refiners by 6%, totaling 5.14 MMBbl/d (257 million metric tons), up from 243 million tons this year
• Initial quotas for 2025 will be allocated by year-end, with possible adjustments based on refiners' feedback and new capacity
• China’s weaker oil demand in 2024 has led OPEC and the IEA to lower global oil demand growth forecasts for this year

• Prompt gas was 1.7c higher to $2.328/MMBtu (As of 7:45 AM)
• Winter ‘24/’25 strip is down 1.8c to $2.821, and the Summer ’25 strip is down 1.4c to $3.027
• Today’s European Ensemble indicates a warmer outlook east of the Rockies through early November, with cooling in the Rockies/West, and Lower 48 temperatures are trending above normal, delaying a cooler shift. (Criterion)

• The global LNG market is expected to be tight in 2025 as demand surpasses supply, leading to potential price volatility, according to Wood Mackenzie
• Europe may lose Russian gas volumes after the Ukraine transit deal expires, with only three new supply projects likely ramping up
• Demand is anticipated to shift from Asia to South America, driven by La Nina weather patterns leading to cooler, wetter conditions in Asia and dry weather in South American countries like Brazil
• European gas demand remains under pressure, especially in the power sector, due to higher nuclear, hydro, and renewable generation

• Rio Grande LNG and Texas LNG requested a rehearing of the August decision vacating FERC approvals for the $18.4 B Rio Grande LNG, Rio Bravo Pipeline, and Texas LNG projects
• Developers argued the ruling risks halting projects and financing despite FERC’s earlier approvals after 18 months of review
• NextDecade reported ongoing work on Train 1 and storage tanks since breaking ground in late 2023; further EIS reviews may be completed by July 2025
• Texas LNG requested FERC expedite its review, citing fewer complexities than Rio Grande LNG’s CCS plans