Energy
Oil & Gas
Pricing (Pre-Market Feb 11):
- WTI crude: +2.3% to $65.40
- Brent crude: +2.1% to $70.27
- Natural Gas: -1.5% to $3.069
- Gasoline (RBOB): +1.8% to $1.995
- ULSD (diesel): +2.3% to $2.454
Oil prices are rebounding sharply this morning after closing lower Tuesday (WTI -0.6% to $63.96; Brent -0.4% to $68.80). The move higher is largely driven by renewed geopolitical tensions in the Middle East, including discussion of increased U.S. naval presence and tougher positioning toward Iran. Markets tend to price in potential supply disruptions quickly, which is helping crude trade near morning highs.
At the same time, inventory data is sending mixed signals. Preliminary data showed:
- Crude stockpiles: +13.4 million barrels
- Gasoline: +3.3 million barrels (12th straight weekly build)
- Distillates: -2.0 million barrels
- Cushing hub: +1.4 million barrels
Recent government forecasts point to a global oil surplus in 2026, with supply expected to exceed demand. Current projections show:
- 2026 global demand: 104.8M bpd
- 2026 global supply: 107.8M bpd
- Estimated surplus: roughly 3.0M bpd
Despite near-term geopolitical premiums, the broader outlook still suggests rising inventories over the next two years, which could pressure prices longer term.
Natural Gas
Natural gas is pulling back this morning after a -0.7% decline Tuesday to $3.115.
Warmer weather forecasts across much of the U.S. east of the Rockies are reducing heating demand expectations. However, storage withdrawals remain elevated. This week’s expected storage draw of -262 Bcf compares to the five-year average of -146 Bcf, reflecting lingering winter impacts.
Longer term:
- 2026 Henry Hub forecast: ~$4.31/MMBtu
- 2027 forecast: ~$4.33/MMBtu
- End of March 2026 storage: ~1.87 Tcf
Production is recovering after winter storm disruptions, and increased drilling activity is expected to boost supply later in the year.
Energy Equities
Energy stocks modestly underperformed the broader market Tuesday:
- Broad Energy Index: -0.08%
- Broader Market: -0.33%
Oil services stocks saw the heaviest pressure, with subsectors such as offshore drillers and land drillers declining more than the broader energy group. Refining names also traded lower.
Midstream/pipeline-focused names showed relative resilience, benefiting from stable cash flow characteristics despite commodity volatility.
On Deck (Energy)
Key events this week:
- OPEC Monthly Oil Market Report
- Weekly Petroleum Status Report
- IEA Monthly Oil Market Report
- Weekly natural gas storage data
- U.S. rig count
- Multiple earnings releases
Markets will be focused on confirmation of supply builds and any revisions to global demand projections.
Metals & Mining
Synopsis
Equity futures are modestly higher, while metals are strengthening ahead of key U.S. labor market data. Investors are closely watching economic data for clues about Federal Reserve policy direction.
Metals Snapshot (Pre-Market Feb 11)
- Gold: +1.0% to $5,085/oz
- Monthly: +12.9%
- YTD: +17.1%
- Silver: +5.7% to $85.21/oz
- Monthly: +7.1%
- YTD: +20.4%
- Copper: +2.0% to $6.03/lb
- Monthly: +2.2%
- YTD: +6.2%
- Nickel: -0.4% to $16,980/mt
- Monthly: -3.9%
- YTD: +3.0%
- Zinc: +0.5% to $3,342/mt
- Monthly: +7.8%
- YTD: +9.1%
- Aluminum: -0.7% to $3,063/mt
- Monthly: -3.7%
- YTD: +3.2%
On Tuesday, gold finished -0.6% at $5,050.60, while silver declined -1.9% to $80.71. Despite the short-term pullback, precious metals remain strong year-to-date, supported by geopolitical risks and ongoing investor demand.
Silver continues to trade in a structural supply deficit, with industry estimates pointing to a sixth consecutive year of undersupply in 2026.
Precious Metals
Gold and silver are responding to:
- Geopolitical tensions
- Inflation expectations
- Labor market data
- Continued strong ETF and physical demand in key markets
Recent data suggests gold investment flows have strengthened in Asia, reflecting elevated risk sensitivity.
Base Metals
Copper is firm this morning at $6.03/lb, supported by:
- Supply discipline in certain producing regions
- Stable demand expectations
- Tightness in some concentrate markets
Nickel is under modest pressure following production quota adjustments in Indonesia, while zinc continues to outperform on a month-to-date basis.
Coal markets remain structurally supported in parts of Asia, though longer-term demand projections show eventual transition pressure as renewable energy expands.
Broader Energy & Metals Outlook
Government forecasts suggest:
- Brent crude expected to average $57.69 in 2026
- WTI expected to average $53.42 in 2026
- Natural gas expected to average ~$4.30 in 2026
Electricity demand growth—particularly from data centers—is expected to drive meaningful increases in solar and wind generation over the next two years.
Bottom Line
Energy markets are balancing short-term geopolitical risk premiums against longer-term supply surplus forecasts. Oil is bouncing on Middle East tensions, but inventory builds and rising production suggest structural oversupply risks remain.
Natural gas is weather-driven in the near term, with warmer forecasts easing pressure despite strong storage draws.
Metals remain broadly strong year-to-date, particularly gold and silver, as investors continue to hedge against policy uncertainty and macro volatility.
Volatility could increase as key economic data and global supply reports are released later this week.
