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First Look - Crude dips as IEA slashes 2025 demand outlook

Oil trades lower as IEA slashes 2025 demand outlook
- WTI prompt-month futures fell 58c to $60.95/Bbl on Tuesday morning (7:45 AM CT), pressured by a bearish demand forecast from the IEA
- The agency cut its 2025 global oil demand growth estimate by 300 MBbl/d to 730 MBbl/d and projected a further slowdown in 2026 to 690 MBbl/d
- The downgrade reflects deteriorating economic sentiment amid escalating global trade tensions, though the IEA noted considerable uncertainty given the volatile macro backdrop
- Of the three major monthly reports, the IEA remains the most bearish:
  - OPEC trimmed its 2025 growth forecast by 100 MBbl/d to 1.3 MMBbl/d on Monday
  - The EIA cut its projection last week by 400 MBbl/d to 900 MBbl/d
OPEC production slips in March (IEA)
- OPEC crude output fell by 130 MBbl/d in March as declines in Iran and Venezuela offset gains in Saudi Arabia and Kuwait
- Kazakhstan held steady at 1.8 MMBbl/d for the second straight month, producing 390 MBbl/d above its OPEC+ quota and trailing only Iraq as the bloc’s top overproducer

Natural gas prices are trading lower again, after falling 20c yesterday
- The Winter ‘25/’26 strip is trading at $4.34/MMbtu, and Summer ’26 is at $3.80/MMbtu
- LNG feedgas demand has dropped to 15.9 Bcf/d, down from weekend highs of more than 17 Bcf/d
  - Pipeline maintenance near Sabine Pass is impacting flows into the facility
Northeast carbon allowance prices fall, supporting power plant economics (S&P)
- Prices for Regional Greenhouse Gas Initiative allowances dropped 21% following an executive order targeting state climate laws
- Power plants in several Northeast states that utilize fossil fuels are required to purchase allowances, which represent a limited authorization to emit one ton of CO2
- Lower allowance prices should boost economics at power plants, and potentially support higher coal burns in the Northeast