Oil Steadies Near Six-Month High as Iran Deadline, Military Build-Up Sustain Risk Premium

Oil holds near six-month high

• The WTI prompt-month contract slipped $0.27 to $66.16/Bbl on Friday morning (7:30 AM CT)
• Prices remain elevated after President Trump indicated Iran has no more than 15 days to reach an agreement on its nuclear program
• He also noted that he is weighing the possibility of a limited military strike
• The US is conducting its largest military deployment to the Middle East since 2003, heightening market concerns over potential supply disruptions
• As a result, crude options markets are showing a stronger tilt toward upside calls, reflecting increased demand for protection against further price gains
• Bloomberg reporting suggests supertanker charter rates could climb toward multi-year highs amid rising geopolitical risk and tight vessel availability
• Additionally, US commercial crude inventories declined by roughly 9 MMBbls last week, the largest draw since early September, according to EIA data

Natural gas prompt month is down -0.2c to $2.994/MMBtu. (As of 07:45 AM CDT)

• There was little change across the two-week weather forecast this morning, temperatures are forecasted to return to the 10-year normal late next week through early March
• US exports rose 0.2 Bcf/d week over week, spurred on by gains in LNG noms (Criterion)
• Canadian imports fell a further 0.7 Bcf/d this week to 5.3 Bcf/d
• • February Canadian imports are sitting at an average of 5.9 Bcf/d, down from 7.3 Bcf/d last month

FirstEnergy unveils updated $36B capital plan (S&P)

• FirstEnergy has increased its five-year investment plan by about 30% from $28B to $36B
• They filed for approval to build and operate a 1.2 GW gas-fired plant in West Virginia on Feb 13th
• • Executives plan to dedicate this 1.2 GW to data center load
• According to executives, they see data center demand growth across Maryland, Pennsylvania, and Ohio