Crude Swings on Latest Iran Comments; Natural Gas Slips Despite Colder Shift

Crude swings as traders assess new US-Iran signals

• The prompt WTI contract climbed $0.53 to $63.42/Bbl early Monday (7:30 AM CT) before reversing lower following fresh remarks from Iran’s Foreign Minister Abbas Araghchi
• Iranian state television said a section of the Strait of Hormuz, one of the world’s most critical oil transit routes, will be shut for several hours Tuesday during military exercises
• Prices retreated toward session lows after Araghchi indicated Iran and the United States had reached a broad understanding on guiding principles following what he described as serious and constructive discussions
• A new round of US-backed negotiations aimed at ending Russia’s war in Ukraine opened in Geneva, focusing on security and humanitarian matters

Natural gas prompt month is down -14.7c to $3.096/MMbtu (07:45 AM CDT)

• The Euro Ens weather forecast shifted colder this morning, with L48 temperatures falling -19.0 °F (Criterion)
• • Losses were centered in the 6-10 range as a cold spell is expected to sweep across all regions except the West Coast next week
  • Next weeks cold spell is forecasted to send HDDs back above the 10 YR average, at around 25 HDDs at the peak of the cold spell
• Early cycle nominations reported by S&P have production at 108.5 Bcf/d this morning

S&P forecasts stronger demand over two week forecast period

• Forecasted temperatures are expected to dip back below the 10 YR average with next weeks cold spell, and demand is expected to return above the 10 YR average in return
• The 11-15 day period is still forecasted to be very mild, roughly in line with the 10 YR average

LNG nominations strengthened this weekend, operating at an average over 20 Bcf/d (Criterion)

• The strengthening was mostly accounted for by Golden Pass, which nominated 333 Mcf/d of feedgas this morning