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First Look - OPEC+ eyes further supply hikes amid glut fears

OPEC+ weighs another major supply hike for July
- OPEC+ is considering a third consecutive production increase in July, with a 411 MBbl/d hike among the options being discussed
- The WTI prompt-month contract dropped $0.92 to $60.65/Bbl Thursday morning (7:45 AM CT)
- If implemented, this would mark the third straight month the group has raised output by triple the pace outlined in its original plan—fueling concerns about a potential oversupply
- A final decision is expected at the June 1 meeting, with many analysts warning of continued downside risks to prices throughout the rest of the year
Venezuela oil license set to expire (Bloomberg)
- US Secretary of State Marco Rubio announced that the current U.S. oil license for Venezuela will expire next Tuesday, contrary to prior expectations of an extension
- The move could disrupt Chevron’s operations in the country, where the company plays a key role in sustaining local oil output and economic activity

Natural gas is trading lower, extending losses from yesterday
- The EIA will release its weekly natural gas storage report today, with a median expectation of a 119 Bcf injection into storage
  - This would continue the trend of large triple digit storage builds seen over the past few weeks
Gas turbine wait times exceed five years (S&P)
- Demand for gas-fired turbines has surged with equipment manufacturers now seeing costs and wait times for turbines rise
- Siemens said, “Everybody around the world is trying to order new gas turbines and the lead times are somewhere on the order of five years-plus. I’m sure there are examples that are shorter and longer but that seems to be the going number most of the OEMs are quoting,”
- Costs for other materials needed to build a gas-fired power plant have also increased, with a new GE combined cycle facility costing more than $2,400/Kw
Freeport LNG restarts third storage tank (BBG)
- Following an approval from federal regulators, Freeport LNG has resumed service on its third storage tank, which was taken offline after the June 2022 explosion