The WTI prompt-month contract dropped $1.39 to $63.75/Bbl on Thursday morning (7:30 AM CT)
Iranian Foreign Minister Abbas Araghchi said that negotiations are set to take place in Oman on Friday
Differing expectations around the scope and objectives of the talks are sustaining uncertainty, injecting volatility into crude prices as traders reassess the likelihood of escalation versus diplomacy
Prices moved lower alongside declining equities after weaker-than-expected private payroll data revived concerns about slowing US economic momentum
Geopolitical risk continues to support key market signals (Bloomberg)
WTI second-month 25-delta call skew climbed to its highest level since March 2022
A rising call skew indicates traders are increasingly willing to pay for protection against a sharp rally, suggesting the market sees asymmetric upside risk tied to geopolitical disruption rather than downside demand weakness
Separately, another oil-linked exchange-traded fund recorded its largest single-day inflow since the pandemic period
Roughly $200 million entered WisdomTree’s WTI crude ETP in recent days, lifting total assets by more than 25%
Natural gas prompt month contract is up 4.2c this morning to $3.507/MMbtu (07:30 AM CT)
Canadian net imports were crushed this morning by -1.5 Bcf/d to 6.9 Bcf/d, due to Vector and GLGT pipelines pushing more gas into Ontario
Weather in great lakes region is forecasted to remain cold until mid-next week
Demand tightened due to another round of cold hitting late this week and into this weekend, with Power and Rescom adding a combined 3.1 Bcf/d of demand
The L48 14-day forecast shifted colder, with Lower 48 temperatures falling an average of -3.8°F (Criterion)
Losses were primarily in the 1-10 day range in the Midwest, South Central, and Northeast
While this mornings Euro Ens model shifted colder, we are still expected to return above the 10-YR average next week
The US EIA storage report comes out today, with average withdrawal estimates of -375 Bcf (Bloomberg)
This would be the largest withdrawal ever reported, beating out the -359 Bcf withdrawal for the week ending 1/5/2018
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