Oil Holds Middle East Risk Premium; Gas Firms as L48 Cold Peaks

Oil retains US-Iran risk premium

• The WTI prompt-month contract gained $0.21 to $66.96/Bbl on Monday morning (7:39 AM CT)
• Iranian Foreign Minister Abbas Aragchi said Sunday that a diplomatic resolution over Iran’s nuclear program remains possible, though he emphasized Tehran will not yield to pressure from the ongoing US military deployment
• President Trump told reporters Friday that he is weighing the possibility of a limited strike on Iran following the largest US force buildup in the region since 2003
• Fears of a broader Middle East confrontation, alongside multiple supply interruptions, have supported crude prices even as expectations for a global surplus persist
• • Average one-year charter rates for VLCCs have climbed above $92,000 per day, according to Clarkson Research Services Ltd., marking the highest levels in data stretching back to 1988
• Goldman Sachs lifted its oil price outlook for late 2026, citing smaller-than-expected inventory builds across developed economies
• • The bank raised its WTI forecast to $56 from $50

Natural gas prompt month is up 3.7c to $3.084/MMBtu. (As of 07:54 AM CDT)

• Weekend temperature came in cold compared to the 10-year average, as forecasted last week, with today being the coldest day of the short cold spell
• Temperatures are forecasted to rebound to the 10-year average by midweek, with warming starting tomorrow (Criterion)
• L48 temperatures fell -8.5 °F over the weekend, but the shift to near-normal temps throughout the forecast period is still in tact
• • There were large, sub -30 °F losses in the Midwest and Northeast that were almost completely offset by gains elsewhere in the L48 regions

US DOE orders the 4th retirement delay for Michigan coal plant (S&P)

• The 1.41 GW JH Campbell power plant has been issued it’s 4th retirement delay by US Energy secretary Chris Wright as the Trump administration continues to support coal-fired electricity generation
• Wright’s Feb 17th order cited a June 2025 survey conducted by MISO (Midcontinent Independent System Operator) on resource adequacy for 2026 and beyond
• • The survey projected 3.1 GW of additional capacity could be needed to meet MISO’s planning reserve margin for 2026, with further additional capacity needed further into the future