Oil and Natural Gas Fundamentals Reflect Steady Supply and Seasonal Demand
Oil markets are supported by continued discipline from OPEC+ alongside growing non-OPEC+ supply, especially in the U.S. shale plays. Refinery utilization remains elevated to support demand for transportation and petrochemical feedstocks. There have been small draws in inventories of oil storage, reflecting a balance in the supply and consumption of oil during the summer driving season in major consuming markets. Oil market in the U.S. has not seen significant change for a few weeks. Operational inventories at Cushing continue to hold working inventories at minimum levels. Oil product markets, gasoline and distillates have shown steady, strong demand during this summer period as economic activity supports fuel consumption.
Natural gas supply remains strong with the latest production setting new records. Dry gas output remains strong, fueled by oil and gas production as well as dedicated gas production. After some maintenance in the spring, LNG export facilities are operating near capacity with LNG facilities feeding into global demand.