Crude prices retreat on signs of Iran–US backchannel communication
The WTI prompt-month contract slipped $0.22 to $74.34/Bbl on Wednesday morning (7:30 AM CT)
Oil erased earlier gains after reports that Iran had indirectly contacted the US in an effort to de-escalate the Middle East conflict
Despite the diplomatic signal, the war continues to threaten energy flows through the Strait of Hormuz, with attacks across the region triggering a wave of production and export disruptions
Satellite data firm Kayrros reports that major Saudi oil storage facilities are filling rapidly as shipments remain constrained while the Hormuz route stays largely closed to tanker traffic
As of March 1, the Ju’aymah export terminal on Saudi Arabia’s east coast was nearing its remaining storage limits
President Trump said Tuesday that the US International Development Finance Corporation would provide insurance guarantees for vessels moving through the region and that naval escorts could be deployed “if necessary”
Industry participants view the proposal as only a partial mitigation, however, noting that few operational details have been released and security risks for shipping remain elevated
Natural gas prompt month is down -12.7c to $2.927/MMBtu. (As of 07:30 AM CT)
Forecasted temperatures moved warmer today, erasing 12 Bcf of the 26 Bcf of forecasted demand over the two-week period
There was still losses in the northest, primarily in the 1-5 day range, but this was more than offset by gains in the Midwest, South Central, and Western regions (Criterion)
LNG feedgas demand recovered 0.7 Bcf/d this morning to 19.8 Bcf/d as flows returned to Cameron LNG
Heating degree days are limited with the warming weather
Next week’s average temperatures rise to over 56 °F, still not quite warm enough to shift to Cooling degree days
NextDecade targets first LNG in H1 2027 (S&P)
The company continues to advance construction of its Rio Grande LNG Trains 1-5 in preparation for first LNG by H1 2027
The project is expected to add roughly 4 Bcf/d of LNG production capacity, with plans to double this capacity in the future
This project will help satisfy the buildout of LNG feedgas demand over the next 4 years, with the US on pace to add around 8 Bcf/d of export capacity by the end of the decade
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