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First Look - NextDecade plans Rio Grande LNG expansion

Oil traded mostly flat on Monday morning (8:05 AM CT) as WTI oscillated on either side of $70/Bbl
- Long-promised tariffs are scheduled to take effect tomorrow, applying to about $1.5 trillion in annual imports (Bloomberg)
  - Tariffs on our neighbor can raise refinery costs, but a trade war has the potential to negatively impact GDP
- Hedge funds turn sour on WTI
Speculators, as categorized as Managed Money by the CFTC, have turned extremely bearish (technically low net-length)
- Net-length positioning from CTA’s/hedge funds has declined to 67,578 contracts – the lowest level since 2010
- The decline in bullish spec interest helped push WTI down to the $70 level over the past month
- Traders are likely worried about a trade war’s impact on the economy, the projected overhang in supply for 2025, and Trump’s stated policy of wanting lower energy prices

Natural gas prices are trading higher, reversing losses from Friday
- Last week, Henry Hub prices fell 29c, in the first weekly decline in three weeks, as weather forecasts moderated and production recovered
- Weather forecasts shifted moderately colder over the weekend, leading to expectations of higher demand for space heating in the first half of March
- Production output eased over the weekend but remains near an all-time high
NextDecade plans expansion of planned Rio Grande LNG plant (S&P)
- NextDecade, the developer of the Rio Grande LNG export terminal in Brownsville, Texas, is planning to pitch an expansion of three liquefaction trains that would increase capacity by 2.4 Bcf/d
- The facility’s first three trains are currently under construction at the site, which should equal about 2.35 Bcf/d of capacity
- A spokesperson for NextDecade said, "Demand for LNG is expected to grow dramatically between now and 2040, and the ability to develop up to 10 liquefaction trains on a single, contiguous site has meaningful advantages,"