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First Look - Oil gains on fresh Middle East violence; natural gas extends rally ahead of storage data

July 17, 2025 | Narciso Cano

Oil rises as violence in the Middle East outweighs stronger dollar
- The WTI prompt-month contract rose $0.68 to $67.06/Bbl Thursday morning (7:45 AM CT)
- On Wednesday, multiple oil fields in the Kurdistan region of northern Iraq were attacked by drones
  - The attacks caused oil companies in the region to suspend about 200 MBbl/d of production
- According to local Kurdistan authorities, the attacks continued Thursday, and while no one has claimed responsibility officials suspect Iran-backed militias
- Israel struck Syrian military headquarters in Damascus on Wednesday
  - According to Israeli officials, troops have also been moved to the border to prevent attacks against the Syrian Druze community
  - The Druze are a minority group in Syria that the Jewish state has pledged to protect
- The US dollar strengthened after President Trump said he had no plans to remove Federal Reserve Chair Jerome Powell, easing market concerns over his future

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Natural gas is trading higher for a fourth day
- The August Henry Hub contract is up 5c this morning, extending gains from the past several days (8:15 AM)
- While Lower-48 average temperatures were below the ten-year average this week, they should climb above average next week, supporting increased power demand
Another bearish inventory report expected (S&P)
- Analysts are forecasting a storage build of 46 Bcf according to a survey by Platts, which would be larger than the five-year average build of 41 Bcf
- So far, most storage injections this summer have been consistently above average, as power demand has declined slightly compared to last year
- Over the past few months, the deficit in inventories to the five-year average has flipped to a surplus of 173 Bcf

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