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First Look - Crude slips on IEA demand warning and OPEC+ output breach

WTI crude dropped $0.75 to $69.92/Bbl on Wednesday morning (7:45 AM CT), on ongoing OPEC+ quota breaches
- Kazakhstan announced it cannot comply with OPEC+ production cuts, citing foreign control over key oil projects by oil supermajors
- Energy Minister Erlan Akkenzhenov said national interest takes precedence over alliance targets
- The country produced a record 2.17 MMBbl/d of crude and condensate in March (Reuters), well above its 1.468 MMBbl/d crude quota
  - Condensate is exempt from OPEC+ limits
- Kazakhstan is among the top overproducers in the group, alongside Iraq and Russia
The IEA cautioned that oil demand growth is slowing
- Primarily due to a decelerating Chinese economy and global shifts toward EVs and renewable fuels
- Without upside surprises, the agency sees continued downward pressure on prices

Natural gas continues to trade around $3/MMbtu
- Weather forecasts shifted cooler, although temperatures should average about 64 °F over the next two weeks, which should equate to seasonal lows in weather-driven demand
- Production has been about 105 Bcf/d over the past two days, down from about 107 Bcf/d over the weekend
GE Vernova builds gas turbine backlog (BBG)
- Gas turbine manufacturer, GE Vernova, said that its backlog of orders has increased as global electricity demand continues to rise
- The company added 7 GW, bringing the total amount of the backlog to 29 GW, while another 21 GW of turbines have been reserved but haven’t entered the backlog yet, as the projects are in the early stages
  - About 60% are for US customers
- CEO Scott Strazik said, “It’s an indication of the continued strength in gas demand,” and that “We’re going into a phase where the market knows they need more gas for longer.”
- The buildout in data centers, factories, and overall trends in electrification have created a bigger appetite for gas generation