Brent crude prices remained stable at ~$66/bbl, briefly dipping after easing concerns on Russian flows before rebounding to a two-week high of $67.11 on strong refinery and jet fuel demand. Market forward curves showed a rare “smile” shape, with spot prices soft, short-term backwardation, and longer-term contango, underscoring trader caution over oversupply. Henry Hub gas prices slipped to $2.81/MMBtu, while futures also eased, with the EIA revising 2025 averages lower due to stronger storage and unexpected production growth.
Rig activity fell slightly to 538, with oil rigs down 15% year-over-year and gas rigs steady but well below peaks in major shale basins. This underinvestment raises the likelihood of future feedstock constraints even as current supplies remain adequate. For petrochemicals, near-term margin conditions are favorable thanks to stable oil and soft gas pricing. However, the combination of seasonal demand risks and declining rig activity suggests prudent hedging and flexible budgeting strategies to manage potential cost volatility heading into winter.
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