Crude Rises on Prolonged Iran Risk Scenario; Japan Sees Global LNG Demand Surging by 2035

Oil rises as traders weigh Axios article

• The WTI prompt-month contract rose $1.59 to $63.92/Bbl on Wednesday morning (7:30 AM CT)
• Axios indicated that any potential US military action would likely unfold over an extended, multi-week campaign rather than a short, targeted strike similar to last month’s operation in Venezuela
• • Such an escalation could threaten crude transit through the Strait of Hormuz, a critical chokepoint for energy exports from the Middle East
• Negotiations to date have not produced a definitive breakthrough, though Tehran said the two sides reached a broad understanding on the framework for a possible agreement
• A US official said Iranian representatives are expected to return to Geneva within roughly two weeks with a more detailed proposal aimed at narrowing remaining differences

Natural gas prompt month is down -5.7c to $$2.974/MMBtu. (As of 07:45 AM CDT)

• Weather model forecasts shifted colder east of the Rockies, but warmer in the Rockies and West coast (Criterion)
• Gains were centered in the 6-10 day range west of the Rockies, and offsetting losses were centered east of the Rockies in the 11-15 day range
• Weather is still expected to dip below the 10 YR average next week, and to recover back up to the 10 YR average in the 11-15 day range
• • Average L48 temperatures are expected to dip down 3.8 degrees in the week ending 2/27 to 44.5 °F, but are expected to return to 49 °F the following week

Japan’s Inpex expects a 75% rise in Global LNG Demand by 2035 (Bloomberg)

• Inpex, Japan's largest oil and gas producer expects an increase of LNG Demand by 75% to roughly 34,000 Bcf from 20,000 Bcf of Demand per year in 2035
• This could leave the Pacific Coastal region, including much of east Asia, in supply shortfall
• This supply shortfall could be supportive of the US efforts to build out LNG export capabilities over the next decade