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First Look - Oil gains after two-day dip despite talks of Israel-Hezbollah war ending by year-end

Oil prices moved higher after two days of losses despite discussions that Isreal’s war with Hezbollah could be over by year-end
- Reuters reported that OPEC+ nations could delay plans to bring back previously held-back supply in December, citing unnamed sources (BBG)
- As geopolitical risk has dissipated, all eyes are on what OPEC+ will do with its policy at the end of the year
  - The cartel has stated that they want to start unwinding cuts in December and bring back all voluntary cuts through 2025
Isreal is discussing a new deal, led by the US, to end conflict with Hezbollah (Bloomberg)
- The deal would lead to a 60-day pause of hostilities while mediators create a longer peace deal to remove Hezbollah from the border area and increase the number of UN peacekeepers there, Isreal’s Channel 12 TV reported
- The plan still has many hurdles to a cease-fire between the two parties
- “The war in the north will be over by the end of the year,” Israeli Finance Minister Bezalel Smotrich told reporters on Tuesday

Gas trades lower amid warmer-than-normal forecasts in South
- Prompt gas was 4.7c lower to $2.812/MMBtu (As of 7:45 AM)
- Winter ‘24/’25 strip is up 1.6c to $2.885, and the Summer ’25 strip is down 7.2c to $2.997
- European Ensemble shifted warmer today, raising Lower 48 temps by +5.8 degrees, with notable gains in the Rockies/West and forecasts showing above-normal temps for the next two weeks (Criterion)
Panama Canal looks to boost LNG vessel traffic after 65% decline (PGJ)
- Panama Canal Authority seeks to regain U.S. LNG traffic to Asia with a new slot reservation system following a 65% decline due in part to drought impacts and high transit fees
- U.S. LNG shipments have diverted largely to Europe amid demand shifts post-Ukraine invasion, with many vessels choosing longer routes around South America despite restrictions easing
- A new long-term reservation system, effective Jan., lets LNG producers book slots a year in advance, aiming to reduce wait times and increase canal efficiency, with $394M raised in the first auction for 2025 transit slots