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Crude Outlook in Focus as Saudis Cut Oil Prices; Gas Holds Firm Ahead of EIA Data

Oil edges higher after recent pullback
- The WTI front-month contract gained $0.42 to $60.02/Bbl Thursday morning (7:45 AM CT)
- Saudi Arabia reduced the price of its key crude grade for Asia in December to the lowest level in nearly a year, following OPEC+’s decision to pause supply hikes for 1Q 2026
  - Saudi Aramco will cut the price of Arab Light by $1.20/Bbl, setting it at a premium of $1 over the regional benchmark for December, per Bloomberg
  - Market expectations were for a $1.25 reduction
- Analysts warn of a growing global surplus, estimated at 1.74 MMBbl/d in 4Q versus 400 MBbl/d in 3Q, according to ANZ Group Holdings
- China’s restocking is projected to slow sharply amid deteriorating economic conditions and weaker domestic demand, ANZ noted
Ukraine reports drone strike on Lukoil refinery (Bloomberg)
- Ukraine claimed a successful drone attack on the Lukoil Volgograd refinery in Russia
- The facility has a design capacity of about 300 MBbl/d and primarily supplies southern Russian regions
- Kyiv has stepped up strikes on Russian oil infrastructure to curb energy revenues that help fund Moscow’s military operations

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Natural gas trades higher, ahead of EIA storage report
- The December Henry Hub contract has traded in a range between $4.25/MMbtu and $4.40/MMbtu this week, after a sharp rally
- The EIA will release its weekly natural gas storage report today, with a median expectation of a 31 Bcf build
  - This would be smaller than the five-year average build of 42 Bcf
Delfin LNG signs new offtake contract with FID soon (NGI)
- Delfin Midstream has signed a 15-year deal with a Middle East trading firm for 1 MTPA of LNG offtake, as the project advances
- Delfin’s CEO said that a final investment decision on the first floating LNG platform is expected in the coming weeks
- The export project will consist of up to three offshore gas liquefaction platforms located south of Louisiana, with a combined capacity of 1.76 Bcf/d
- The company has already signed deals with Samsung Heavy Industries, Siemens, and Black and Veatch for equipment and construction work