Oil and Gas, Mint Finance

Suhas Reddy

Oil and Gas

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Thematic (Sector/Industry)

<ul>
<li>AI-Driven data centres are breaking a decade of flat U.S. electricity demand, pushing annual growth above historical norms, forcing utilities to expand their capacities.</li>
<li>Meeting this surge requires an all-of-the-above energy mix, where renewables lead new capacity additions, but natural gas remains the critical balancing fuel amid constraints and grid expansion.</li>
<li>The most durable beneficiaries are not power generators but midstream and infrastructure players, including grid builders, equipment manufacturers, and materials suppliers, whose revenues are driven by spending and reliability.</li>
</ul>


AI-Driven data centres are breaking a decade of flat U.S. electricity demand, pushing annual growth above historical norms, forcing utilities to expand their capacities.
Meeting this surge requires an all-of-the-above energy mix, where renewables lead new capacity additions, but natural gas remains the critical balancing fuel amid constraints and grid expansion.
The most durable beneficiaries are not power generators but midstream and infrastructure players, including grid builders, equipment manufacturers, and materials suppliers, whose revenues are driven by spending and reliability.


The AI Boom Is Becoming an Energy Infrastructure Story

Commodities

Natural gas is a naturally occurring hydrocarbon gas mixture consisting primarily of methane, but commonly including varying amounts of other higher alkanes, and sometimes a small percentage of carbon dioxide, nitrogen, hydrogen sulfide, or helium. It is formed when layers of decomposing plant and animal matter are exposed to intense heat and pressure supplied by existing under the surface of the Earth over millions of years. The energy that the plants originally obtained from the sun is stored in the form of chemical bonds in the gas.

<ul>
<li>Winter demand and Europe’s shift from Russian gas have pushed U.S. LNG exports to record highs, tightening domestic balances and reshaping global pricing dynamics.</li>
<li>Upstream natural gas producers gain little from export strength because long-term contracts, hedging practices, and heavy reinvestment cycles limit their exposure to rising spot prices and short-term market volatility.</li>
<li>Midstream companies benefit most as fee-based pipeline revenues scale with higher LNG feed-gas flows. </li>
</ul>


Winter demand and Europe’s shift from Russian gas have pushed U.S. LNG exports to record highs, tightening domestic balances and reshaping global pricing dynamics.
Upstream natural gas producers gain little from export strength because long-term contracts, hedging practices, and heavy reinvestment cycles limit their exposure to rising spot prices and short-term market volatility.
Midstream companies benefit most as fee-based pipeline revenues scale with higher LNG feed-gas flows. 


Who Really Gains from America’s LNG Export Boom?

<ul>
<li>Global gas prices often diverge sharply as Henry Hub and TTF respond to regional conditions, unlike WTI and Brent, which move together due to seamless global crude market integration.</li>
<li>Recently, Henry Hub surged while TTF declined, highlighting how contrasting storage conditions, weather patterns, and demand fundamentals create major regional price disconnects in global natural gas markets.</li>
<li>Although LNG links regions, slow arbitrage, infrastructure limits, policy differences, and contrasting demand mixes prevent price alignment, leaving Henry Hub and TTF shaped by distinct regional fundamentals.</li>
</ul>


Global gas prices often diverge sharply as Henry Hub and TTF respond to regional conditions, unlike WTI and Brent, which move together due to seamless global crude market integration.
Recently, Henry Hub surged while TTF declined, highlighting how contrasting storage conditions, weather patterns, and demand fundamentals create major regional price disconnects in global natural gas markets.
Although LNG links regions, slow arbitrage, infrastructure limits, policy differences, and contrasting demand mixes prevent price alignment, leaving Henry Hub and TTF shaped by distinct regional fundamentals.


Why Global Gas Prices Keep Breaking Apart Despite an LNG-Connected World

<ul>
<li>Henry Hub surged on cold forecasts and record LNG demand, while TTF stayed soft due to tepid demand. Weather and LNG flows now drive a volatile winter spread.</li>
<li>The Henry Hub–TTF spread faces exceptional uncertainty, shaped by diverging regional fundamentals. Henry Hub remains sensitive to U.S. forecast shifts, while TTF is anchored by strong EU storage.</li>
<li>With weather driving short-term volatility, the spread remains highly unpredictable. Even steady U.S.–Europe LNG flows offer only partial stability as shifting forecasts and regional imbalances continue to reshape price dynamics.</li>
</ul>


Henry Hub surged on cold forecasts and record LNG demand, while TTF stayed soft due to tepid demand. Weather and LNG flows now drive a volatile winter spread.
The Henry Hub–TTF spread faces exceptional uncertainty, shaped by diverging regional fundamentals. Henry Hub remains sensitive to U.S. forecast shifts, while TTF is anchored by strong EU storage.
With weather driving short-term volatility, the spread remains highly unpredictable. Even steady U.S.–Europe LNG flows offer only partial stability as shifting forecasts and regional imbalances continue to reshape price dynamics.


Gas Markets See Divergence Due to Weather, LNG Flows and Europe’s Calm Start

Heating oil, also known as No. 2 fuel oil, accounts for about 25% of the yield of a barrel of crude, the second largest "cut" after gasoline. The heating oil futures contract trades in units of 42,000 gallons (1,000 barrels) and is based on delivery in New York harbor, the principal cash market trading center. Options on futures, calendar spread options contracts, crack spread options contracts, and average price options contracts give market participants even greater flexibility in managing price risk.
The heating oil futures contract is also used to hedge diesel fuel and jet fuel, both of which trade in the cash market at an often stable premium to NYMEX Division New York harbor heating oil futures.

<ul>
<li>Refining margins surged as diesel shortages deepened, driven by outages, sanctions, and shrinking Western capacity. Diesel-led product strength lifted refining margins even as crude stayed weak.</li>
<li>The U.S. crack spread hit its 2025 high in November. Despite a brief correction, Europe’s structural tightness will keep the demand for diesel high.</li>
<li>Europe’s sanctions, limited capacity, and winter demand will boost U.S. exports, keeping gasoline and distillate inventories tight despite temporary price corrections.</li>
</ul>


Refining margins surged as diesel shortages deepened, driven by outages, sanctions, and shrinking Western capacity. Diesel-led product strength lifted refining margins even as crude stayed weak.
The U.S. crack spread hit its 2025 high in November. Despite a brief correction, Europe’s structural tightness will keep the demand for diesel high.
Europe’s sanctions, limited capacity, and winter demand will boost U.S. exports, keeping gasoline and distillate inventories tight despite temporary price corrections.


Diesel Tightness Isn’t Done Yet: Refining Margins Look Set to Stay Elevated

Energy Transition | AI | Shifting World Order