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First Look - Goldman Sachs sees Russian oil continuing to flow

Oil trades lower, extending losses from last week
- Last week, WTI prices fell about $3.50/Bbl, following comments from Trump on trade and OPEC policy
- Over the weekend, the US administration threatened economic action against Columbia but held off as the country’s government agreed to Trump's conditions
Two-tier pricing emerges for Russian ESPO cargoes (BBG)
- Chinese buyers are now being offered two pricing options for Russian ESPO crude cargoes, with either a higher price for oil delivered on non-sanctioned vessels or a discounted price for crude loaded onto sanctioned ships
- Cargoes on non-sanctioned vessels are being priced at a $5/Bbl premium to Brent, while sanctioned cargoes are priced at a $2/Bbl premium to Brent
- Chinese buyers have become more wary of purchasing sanctioned oil even before recent US sanctions, leading to a large amount of Russian crude idling off-shore
Goldman Sachs sees Russian oil continuing to flow (BBG)
- The bank said that recent sanctions are unlikely to result in a major impact on Russia’s crude production
- Rising freight costs have led non-sanctioned vessels to move Russian oil, filling the gap left by blacklisted tankers
- Western policymakers are expected to prioritize maximizing discounts rather than reducing output, although uncertainty remains high

Natural gas traded 28c lower to $3.74/MMbtu (8:06 am CT) on Monday morning as weather forecasts downgraded the degree of cold
- The March contract, which will take over as the prompt contract later this week, was down 15.6c to $3.29
- A warmer shift through the end of the month has pushed total January HDDs lower to 1019, which is still the coldest US January in 11 years but is now the 5^th coldest of the 2000’s
- The Commodity Weather Group still suggests that February weather has a large risk range (range of HDDs), but top-tier cold unlikely
- US Lower 48 natural gas production was modeled at 103.4 Bcf/d Monday morning as weather warms and freeze-offs dissipate
Williams announced that FERC reinstated the certificate for Transco’s Regional Energy Access Expansion (REA) (Businesswire)
- The Order reinstates the certificate for REA as issued in its original order and will take effect immediately
- The REA project prices gas supplies to 4.4 million homes annually in New Jersey, New York, Pennsylvania, and Maryland
- Williams started service on REA Phase 2 in August of 2024, which adds 379 MMcf/d of capacity from the Leidy storage hub