Oil Rises on Marine Administration Warning; Natural Gas Slides on Warmer Forecasts

Oil edges lower after US–Iran talks

• The WTI prompt-month contract slipped $0.27 to $63.28/Bbl on Monday morning (7:51 AM CT)
• Crude weakened as Middle East tensions cooled following US–Iran discussions in Oman on Friday aimed at easing nuclear-related frictions
• President Trump indicated another round of meetings could take place early this week
• He also signed an executive order allowing tariffs on countries that continue trading with Iran
• • No specific tariff level was announced, though a 25% rate was cited as a possible benchmark
• Ole Hansen, Saxo Bank’s head of commodities strategy, warned that fading Iran-related risk could shift attention back to oversupply, potentially pulling prices toward $60
• The week ahead should offer clearer direction, with updated market outlooks scheduled from the EIA, OPEC, and the IEA
• Update: The US Maritime Administration later advised "US ships should stay as far from Iran waters as possible" reversing earlier price movement

Natural gas plunges more than 25c as demand outlook softens

• The March Henry Hub contract is trading near $3.12/MMbtu, extending losses from last week, and is down about $1.31/MMbtu since peaking on January 30 (8:10 AM)
• Lower-48 population-weighted weather forecasts shifted warmer, with temperatures expected to be at or above the ten-year average for most of the next two weeks
• • Weather-driven gas demand should trend lower over the next two weeks, from current levels of about 106 Bcf/d
• Dry gas production is still down about 2 Bcf/d from the highs seen earlier this winter, with output at 107.5 Bcf/d, according to data from S&P

PJM cuts near-term data center demand forecast (S&P)

• PJM, the largest US power grid, is now projecting lower data center driven power demand in the near term, but higher demand over the next 20 years
• Demand projections for 2026-2029 were lower by about 2-5% compared to previous forecasts
• • The 2040 demand forecast increased by 7.8%
• A resource planning expert from PJM said the changes occurred after PJM “took a hard look” at load adjustments that are three years or sooner and have electric service obligations or construction commitments