First Look: Kinder Morgan declares force majeure on West Texas gas pipeline after fire

Oil is trading lower, around $83.25, after finishing last week higher by more than $1
- Oil prices rallied last week, reversing losses from the prior two weeks
- Mexico is expected to reverse export cuts of at least 330 MBbl/d for May due to weaker-than-expected refinery demand
US pushes for ceasefire in Gaza (BBG)
- US Secretary of State Antony Blinken will be visiting the region this week to push for a truce between Israel and Hamas in an effort to avoid an Israeli invasion of Rafah
- The Israeli foreign minister said that if a ceasefire can be agreed upon, then the invasion of Rafah will be suspended
- A ceasefire is a potentially bearish factor for crude prices, as the ongoing conflict is leading to increased risk premium in crude prices due to the risk of the conflict expanding and threatening oil supply
Saudis expected to raise prices delivered to Asia (BBG)
- Saudi Aramco is anticipated to increase their official selling price of Arab Light delivered to Asia, according to a Bloomberg survey of six refiners and traders
- Arab Light OSP is expected to rise 60c from a $2/Bbl premium to Brent to $2.60/Bbl premium

Natural gas prices trade cautiously higher despite growing storage surplus and weak weather outlook
- June ’24 Henry Hub is up 1.4c this morning to trade around $1.937/MMBtu
- The Summer ’24 strip is up 16.2c to $2.340 and Winter ‘24/’25 strip is up 3.7c to $3.446
- Today's Euro Ensemble indicates a significant warming trend, especially in the Midwest, with a +48^o F increase from Friday's model, and predicts above-normal temperatures into early/mid-May
Kinder Morgan declares force majeure on West Texas gas pipeline after fire (P&GJ, Criterion, BBG)
- Kinder Morgan reported a fire on the Lockridge Lateral segment of the NGPL system in Ward County, Texas, leading to a force majeure declaration
- The incident, involving a natural gas release and fire, occurred near Pyote, Texas, and was extinguished after burning most of the day; flows to 10 locations in West Texas are disrupted, trapping gas in the region
- The force majeure reduced capacity to approximately 0.1 Bcf/d, shifting from an early impact of over 0.5 Bcf/d, with several meters shut down, resulting in production receipts below 0.4 Bcf/d and no recovery timeline provided
- Following the fire, intraday cash prices at the Waha hub fell to around -$3/MMBtu on Friday from around -$0.50/MMBtu earlier in the day, according to traders