JPM | US Energy: IEA Sees Oil in Surplus, IEA Members to Double Pace of Releases, Turbine Orders +18% in 3Q, Inventories Build, Gas Tanker Hit, WH Expected to Extend Jones Act Waiver, HH Rally

AI research summary

JPMorgan's US energy desk flags a decisive shift to oversupply: the IEA now estimates October output exceeded demand by nearly 2 mmb/d (JPM 1.4) and has revised September from deficit to a 600 kb/d surplus. IEA members plan a further 71 mb of emergency releases through end-February 2027, roughly 600 kb/d and double the September-October pace, with ~37 mb from the US SPR and ~33 mb from Europe including ~15 mb of diesel. US inventories built across the barrel, with crude up 4.7 mb against a 0.7 mb consensus draw. The offsetting bullish thread is gas turbines: Q3 global orders of ~27.1 GW rose 17.8% y/y, pointing to 140-150 GW for FY26 versus ~100 GW in FY25, with capacity near 85 GW by 2028 and 100 GW+ post-2030. Henry Hub prompt has rallied ~25% to $3.30 on record-short positioning and short covering, though fundamentals look less supportive as production is revised to ~109 Bcf/d and weather warms.

Bull case：The IEA has flipped from deficit to surplus, with October oversupply near 2 mmb/d and September revised to a 600 kb/d surplus, corroborating JPM's own balances; Emergency releases double to ~600 kb/d through February 2027, with the US contributing ~37 mb of SPR crude and Europe ~33 mb including 15 mb of diesel; Gas turbine orders of 27.1 GW in Q3 are up 17.8% y/y and 117% versus Q3 2024, implying 140-150 GW of FY26 intake versus ~100 GW in FY25; Henry Hub prompt gas has rallied ~25% to $3.30 as net length sat at its shortest in seven years, CTA signals turned long and gas E&Ps delivered the best US O&G subsector performance this quarter at +13%; A likely extension of the Jones Act waiver beyond November 15 keeps domestic waterborne crude and product flows flexible, easing regional bottlenecks.

Key risks：Warm Super El Nino weather is realising as forecast while production is being revised sharply higher to ~109 Bcf/d, undercutting the Henry Hub rally; The gas rally is substantially positioning-driven, with the 2027 strip up less than 5% off lows and CTA flows prone to rapid reversal; Growing oil surplus plus accelerating strategic releases could sustain pressure on crude and product cracks; Geopolitical supply losses in Hormuz remain binary, with at least 10 vessels attacked in the first ten days of November versus a wartime high of 37 in October; Refinery utilisation at 95.2% and builds across the barrel point to softening near-term product margins.

Stocks：NexGen Energy（NXE）、Enovix（ENVX）、GE Vernova（GEV）、三菱重工（7011.T）、SoftBank Group（9984.T）

Generated by DeepSeek from the report's first page; the PDF excerpt will be added when extraction completes.