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First Look - Oil steady as OPEC+ supply fears tempered; natural gas set for weekly gain

Oil holds steady as trade optimism offsets supply fears (Bloomberg)
- WTI crude edged up $0.06 to $63.43/Bbl early Friday (7:45 AM CT), with easing US-China trade tensions helping counterbalance concerns of a supply surplus later this year
- Prices have remained confined to a $4 range since mid-May, and US crude volatility has dropped to its lowest level since early April
- HSBC’s Kim Fustier warned that while 2Q/3Q markets appear balanced, fundamentals may weaken post-summer, weighing on prices
HSBC: OPEC+ to complete cut reversal by year-end
- OPEC+ is expected to proceed with supply hikes of 411 MBbl/d in August and 274 MBbl/d in September, per HSBC
- The group will transition to smaller, regular monthly increases from October through December, fully reversing the 2.2 MMBbl/d in voluntary cuts by year-end
- HSBC had previously forecast a slowdown in hikes from August and a pause in early 2026, continuation of accelerated hikes may reflect motivations beyond seasonal demand
FGE: July OPEC+ supply rise likely below headline 411 MBbl/d
- OPEC+’s planned 411 MBbl/d m-o-m increase for July will likely result in a net gain of only 225 MBbl/d, according to FGE
- Iraq, Kazakhstan, and Russia are expected to maintain current production levels, limiting the group’s overall boost
- Saudi Arabia is estimated to raise output by 375 MBbl/d in June versus February, but exports may fall by around 200 MBbl/d due to rising domestic demand

July Henry Hub heads for weekly gain, reversing last week’s losses
- Temperatures are expected to climb steadily over the next two weeks, leading to higher power sector gas demand
- Yesterday the EIA reported a 122 Bcf injection, which was larger than anticipated and pushed the surplus to the five-year average to +117 Bcf
- LNG feedgas demand remains lower at 14.3 Bcf/d
Venture Global begins work on CP2 LNG (S&P)
- Ahead of its final investment decision, Venture Global has begun site work on the Calcasieu Pass 2 LNG export project
- The announcement comes about a week after FERC granted the company approval to begin construction on the project
- The first liquefaction unit is expected to be delivered by mid-2025, with 12 trains already being manufactured
- The plant will have an initial capacity of 2.6 Bcf/d, and is expected to enter service in 2029