Market Insights > First Look

First Look - Oil eases on Russia deadline; gas climbs as summer heat builds

Oil prices slip as Trump sets deadline for Russia deal
- The WTI prompt-month contract fell $0.16 to $66.82/Bbl Tuesday morning (7:45 AM CT)
- President Trump has given Russia 50 days to end its war in Ukraine
- Supply disruption concerns were alleviated following the deadline announcement, with Russian sanctions no longer posing an immediate threat
- Trump also threatened secondary tariffs on countries doing business with Russia, with China, India, and Turkey among the biggest buyers of Russian crude
- Goldman Sachs raised oil price forecast for the second half of 2025 (yahoo finance)
Kazakhstan lifts oil output 12%, says it’s staying in OPEC+ (Reuters)
- H1 2025 production rose to 49.9 million tons, up 11.6% y/y, driven by Tengiz field expansion
- Kazakhstan has consistently overproduced above OPEC+ quota, frustrating some members
- Officials say the country has no plans to leave the producer group

Natural gas is up slightly, extending gains from yesterday
- Lower-48 gas demand is expected to trend slightly higher over the next two weeks, as temperatures rise from an average of 73.3ºF this week to 75.6ºF
- Gas production remains around 105 Bcf/d
- LNG feedgas demand has eased from its recent high of 16.69 Bcf/d to 15.93 Bcf/d
Kansas City Fed sees $5 gas needed for production growth (S&P)
- Natural gas prices remain above 2024 levels, but prices may not be high enough to encourage increased drilling activity
- Several operators surveyed by the Kansas City Federal Reserve indicated the outlook for the gas market is strong, but prices need to rise to at least $5.01/MMbtu to justify a significant increase in drilling activity
- One respondent said “Current natural gas prices are stronger than the last few years, which will encourage drilling in the mid-term. The increased production that results softens prices longer term,”