Oil & Gas Prices - Jan 15

[dan_s]

OPEC+ production and exports declined in December. Weekly data from Kpler shows that OPEC+ continued to decline in the first two weeks of January.

WTI crude oil futures fell about 3% to around $60 per barrel on Thursday morning, ending a five-day rally as geopolitical risk eased.
> President Donald Trump signaled the US may delay military action against Iran, saying he had received assurances that the killing of protesters would stop. That reduced fears of an immediate conflict that could disrupt Iranian output or key shipping routes.
> Even so, tensions remain high, with Iran temporarily closing airspace around Tehran and the US adjusting the deployment of personnel at regional bases.
> Oil had risen earlier in the year as unrest in Iran and political turmoil in Venezuela rebuilt a geopolitical premium after months of losses driven by oversupply concerns.
> Trump also pointed to renewed engagement with Venezuela, adding uncertainty around future crude flows.
> On the supply side, US crude inventories posted their largest weekly build in months, reinforcing downside pressure.

From EIA on January 14: Summary of Weekly Petroleum Data for the week ending January 9, 2026

U.S. crude oil refinery inputs averaged 17.0 million barrels per day during the week ending
January 9, 2026, which was 48 thousand barrels per day more than the previous week’s average.
Refineries operated at 95.3% of their operable capacity last week. Gasoline production increased
last week, averaging 9.0 million barrels per day. Distillate fuel production decreased by 18
thousand barrels per day last week, averaging 5.3 million barrels per day.

U.S. crude oil imports averaged 7.1 million barrels per day last week, increased by 752 thousand
barrels per day from the previous week. Over the past four weeks, crude oil imports averaged
about 6.1 million barrels per day, 5.7% less than the same four-week period last year. Total
motor gasoline imports (including both finished gasoline and gasoline blending components) last
week averaged 448 thousand barrels per day, and distillate fuel imports averaged 220 thousand
barrels per day. < Higher oil imports caused the build in crude oil imports. U.S. oil production is probably on decline.

Inventories:
> U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.4 million barrels from the previous week. At 422.4 million barrels, U.S. crude oil inventories are about 3% below the five year average for this time of year.
> Total motor gasoline inventories increased by 9.0 million barrels from last week and are about 4% above the five year
average for this time of year. Finished gasoline inventories decreased, while blending components inventories increased last week.
> Distillate fuel inventories slightly decreased last week and are about 4% below the five year average for this time of year.
> Propane/propylene inventories decreased 2.4 million barrels from last week and are about 33% above the five year
average for this time of year.
>> Total commercial petroleum inventories increased by 6.2 million barrels last week.

Total products supplied over the last four-week period averaged 20.0 million barrels a day, 1.1%
below the same period last year. Over the past four weeks, motor gasoline product supplied
averaged 8.5 million barrels a day, similar to the same period last year. Distillate fuel product
supplied averaged 3.7 million barrels a day over the past four weeks, up by 2.2% from the same
period last year. Jet fuel product supplied was up 4.2% compared with the same four-week
period last year.
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US natural gas futures slid almost 10% to about $3.17/MMBtu, nearing their lowest level since October 17, due to reduced gas flows to LNG export facilities.
> LNG feedgas was on track to drop to a preliminary two-month low of 17.4 bcfd on Wednesday due to declines at Cheniere Energy’s Corpus Christi facility and Freeport LNG. Deliveries to Freeport are expected to edge up toward 1.4 bcfd on Wednesday, up from 0.7 bcfd on Tuesday, though still below the recent average of 1.9 bcfd.
> The plant’s three liquefaction trains can process up to 2.4 bcfd when fully operational.
> Weather forecasts remain supportive, with colder-than-normal temperatures expected across much of the US through January 29, potentially lifting heating demand later this month.
> On the supply side, domestic production has eased slightly, averaging 109.3 bcfd in January, down from December’s record. < I expect to see reports of well freeze offs over the next few days. It is very cold in the Williston Basin and in Appalachia.

[dan_s]

The primary driver behind the recent drop in OPEC+ supply appears to be Kazakhstan, where crude oil production and exports have fallen sharply. This stems from a series of Ukrainian drone attacks targeting Russian energy infrastructure, including processing facilities, the Caspian Pipeline Consortium (CPC) marine terminal near Novorossiysk (Russia’s Black Sea port, through which ~80% of Kazakhstan’s oil is exported), and multiple tankers en route to load Kazakh crude.