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Trump Pressures Moscow; Natural Gas Slides Toward Second Weekly Drop

Oil slips as Trump pressures Moscow and allies
- The WTI prompt-month contract fell $0.34 to $63.23/Bbl Friday morning (7:45 AM CT)
- President Trump said Russian President Putin had “really let him down” and warned allies to halt purchases of Russian oil if they want greater U.S. involvement in pressuring the Kremlin over Ukraine
  - Trump suggested he may consider additional punitive measures but made clear they hinge on allies cutting Russian energy imports
- Russian refined product exports have dropped to a wartime low after Ukrainian drone strikes on refineries curbed output and producers prioritized the domestic market
  - Attacks on major facilities pushed processing rates below 5 MMBbl/d, fueling gasoline shortages and prompting officials to weigh extending a road-fuel export ban through October
- “Refinery assaults are providing some upside support to oil, though expectations of a looming surplus keep a lid on prices,” said Edward Bell of Emirates NBD
India sustains Russian crude intake (Bloomberg)
- Indian refiners plan to keep buying Russian barrels as fuel demand rises with the end of the monsoon season
- Flows from Russia had eased under U.S. pressure but are likely to rebound with ample Urals supply and less aggressive U.S. pushback

Regional Market Insights

Updated regularly with the most important market moves and outlooks.

Natural gas heads for a second weekly loss
- The October Henry Hub contract is down about 7c this week and 24c over the past two weeks (8:15 AM)
- Yesterday the EIA reported a 90 Bcf injection into storage, which expanded the surplus to the five-year average, now at +204 Bcf
- Lower-48 gas demand should trend lower over the next two weeks, as US population-weighted temperatures decline toward 69 ºF, from this weeks average of 73.9 ºF
Speculators most bearish on Houston Ship Channel basis (NGI)
- According to CFTC and ICE data, speculators are more bearish on HSC basis than any of the 54 other US gas basis hubs traded on ICE
- As of September 9, speculators are short 194k HSC basis contracts and long only 2.7k, while being short 127k contracts of the HSC index swap and long zero
- This net-short position has risen sharply since July
- Based on open interest figures, it appears that 95% of these positions are in contracts through the end of 2027