Market Insights > First Look

First Look - Oil heads for a fourth weekly gain

Oil is trading lower but heading for a weekly gain
- WTI is heading for a modest weekly gain, driven by increased US sanctions, which may disrupt global crude supply
- Physical markets have strengthened, with prompt spreads widening
Houthis signal pause to Red Sea shipping attacks (BBG)
- Following the ceasefire between Israel and Hamas, the Houthi militants in Yemen signaled that they may pause attacks on commercial vessels
- The leader of the group did say that the option of continuing attacks remains open
- Attacks on vessels in the Red Sea led to a significant increase in geopolitical risk premium, supporting oil prices and rerouting flows

Gas rallied to $4.328/MMBtu yesterday as the strongest cold event of the season remains on schedule for next week.
- The February contract has pared gains this morning, dropping to $4.01 (8:06 CT) after settling at $4.25 on Thursday.
- Cash Henry Hub gas for the weekend, plus the Monday holiday, was trading near $10/MMBtu on Friday morning as cold temperatures hit the South on Sunday.
The EIA reported a hefty 258 Bcf draw from inventories yesterday for the week ending January 10
- The withdrawal was in line with the average analyst estimate.
- The next three January inventory reports are forecast to total another 720 Bcf in storage withdrawals amid the anomalous cold.
- This would be 189 Bcf more than the five-year average drawdown.
Southeast Texas is forecast to experience a precipitation event on Monday night into Tuesday morning
- The estimated 48-hour snowfall total is 1-2 inches, accompanied by freezing rain.
- Initially, the snowfall was forecast for the San Antonio/Austin area and parts of Southeast Texas, but updated models have shifted the focus more toward Houston.