Oil prices started the year down on Friday morning with WTI dropping below $57/Bbl (8:00 AM)
Analysts have forecasts large supply overhangs in 2026, but especially for 1Q 2026
OPEC+ members led by the Saudis will meet online on Sunday January 4
Expectations are the group will reaffirm a decision to pause supply increases during the first quarter
The looming supply excess is countering the potential output disruptions around the globe
Russian oil vessels resuming normal operations to India?
At least three Russian oil tankers are currently indicating Reliance Industries Ltd’s plant on India’s west coast as their next destination (Bloomberg)
Captains of vessels give live signals detailing their current location and upcoming discharge ports – These can change
A Reliance spokesman denied the cargoes had been purchased
Why it matters – Reliance is India’s largest corporate buyer of Russian crude with half of Russian crude oil shipments bound for India going to Reliance refineries.
After the latest round of sanctions on Russia, Reliance greatly reduced their purchases of Russian crude and sourced it from places like Saudi Arabia, Iraq, and the US.
If Reliance does resume buying more Russian crude, it could a signal that some type of workaround sanctions is in place.
Natural gas heads for weekly loss. Reversing last week’s gain
The February Henry Hub contract is trading around $3.60/MMbtu this morning, with prices down about 35c this week (8:10 AM)
Lower-48 population-weighted weather forecasts show temperatures should climb well-above the ten-year average for the first week of January, before falling back to average levels around January 11
Dry gas production remains lower, at around 108.6 Bcf/d, down from this week’s high of 109.5 Bcf/d, according to data from S&P
Growth prospects emerge in Appalachian basin (NGI)
After several years of stagnant gas production and prices in the northeast, activity could ramp up into the second half of the decade
Production has been stuck around 33 Bcf/d in recent years, but new pipeline projects could help expand that, with the 600 MMcf/d Constitution Pipeline and 400 MMcf/d Northeast Supply Enhancement developed by Williams entering service in 2027
Other projects in the region include Eastern Gas Transmission’s 550 MMcf/d Appalachian Reliability Project, Boardwalk Pipeline’s proposed 2 Bcf/d Borealis pipeline, and EQT’s MVP Boost and Southgate
Data center and electricity demand growth is driving much of the buildout, as PJM expects 5% annual load growth over the next ten years and warned of supply shortfalls in 2026-2027
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