A Major Crude Inventory Draw is Supporting Prices: The big market driver this week was the major U.S. crude inventory draw reported by the EIA. Inventories have now dropped by more than 30 million barrels since June, which is a classic bullish signal of a tightening supply situation and is providing strong support for oil prices as we head into the fall.
EIA Expects Record U.S. Production Despite Fewer Rigs: On the other side of the supply equation, the EIA just raised its 2025 production forecast for the U.S., expecting output to hit new highs. This is significant because it shows that government analysts are confident that incredible efficiency gains in the shale patch will more than offset the recent drop in rig counts.
Natural Gas Demand Continues to Exceed Expectations: On the gas side, demand is proving to be much stronger than many predicted, largely because LNG exports remain very high as global buyers compete for supply. This shows how tied the U.S. gas market now is to international events, which is keeping the domestic market tight and supporting prices.
U.S.-Iraq Talks Could Unlock Kurdish Oil: On the international front, a key issue to watch is the new talks between the U.S. and Iraq over the long-running dispute on Kurdish oil exports. A resolution is a potential wildcard for the market, as it could bring millions of barrels of crude back onto the global market, which would be a significant factor for future prices.
New Mexico Approves Expanded Wastewater Use in Drilling: In domestic policy, New Mexico just approved a new plan to expand the use of treated wastewater in oil and gas operations. This is a significant move that will reduce the industry's freshwater use in an arid region—a major win for sustainable operations and addressing a key ESG concern.
A Key Midstream Deal Highlights Gulf Coast Importance: And in midstream news, Enstor is acquiring the Black Bear Gas Pipeline System. This is a strategic move to expand its footprint in the critical Gulf Coast storage and transportation hub, reflecting the growing value of the infrastructure needed to support America's record-breaking LNG exports.