Oil climbs above $60 as geopolitical tensions escalate
The WTI prompt-month contract rose $1.17 to $60.67/Bbl on Tuesday morning (7:45 AM CT)
Futures extended gains after President Trump announced a 25% tariff on goods from countries “doing business” with Iran and signaled he has not ruled out military action following the capture of Venezuelan leader Nicolás Maduro
A Carlyle executive noted that “geopolitical risk is at an all-time high,” suggesting the backdrop could support higher prices
Options markets reflect this upside risk, with traders paying the largest premiums for bullish contracts since the Iran–Israel conflict last year (Bloomberg)
While potential disruptions to Iranian exports may offset some glut concerns, these near-term risks continue to clash with a fundamentally oversupplied global market
Russian crude barrels back up on the water (Bloomberg)
Tankers carrying Russian Urals crude are piling up offshore as Moscow struggles to regain market share in India
At least 12 vessels laden with Urals are anchored off the southern coast of Oman, some since mid-December, with additional ships arriving almost daily
Natural gas extends gains as weather forecasts shift colder again
Over the next seven days, Lower-48 population-weighted average temperatures are forecast to fall below the ten-year average, supporting near-term gas demand
Demand should reach a new high for the winter 2025/2026 season over the next two weeks
LNG feedgas demand has reached a new record high, with inflows to export plants reaching 20.62 Bcf/d
Northeast production falls as demand and prices fade (S&P)
Dry gas output in Appalachia has fallen from 37 Bcf/d in late December to an average of about 36 Bcf/d in January
Northeast production will often rise during periods of stronger local demand as it frees up more pipeline space
Northeast temperatures averaged 33.2 ºF in December, the coldest since 2010, but have warmed up to more than 40 ºF in recent days
There may be more upside to gas output over the next two weeks, as Northeast temperatures are currently forecast to fall below the ten-year average again
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