WTI Slips as US Scrambles for Policy Solutions; Gas Slips as Warming Weather Offsets Strong LNG Demand

Crude prices stall as White House exhausts policy options

• The WTI prompt-month contract fell $1.57 to $94.16/bbl on Friday morning (7:30 AM CT)
• In an effort to cool the recent surge in prices, the US issued a second temporary waiver allowing purchases of Russian crude
• • The latest measure applies to cargoes loaded before March 12 and expands on an earlier directive that primarily allowed India to increase imports
• The US government is also moving forward with a release of roughly 172 MMBbl from the Strategic Petroleum Reserve and is reportedly considering additional steps, including potential intervention in the futures market and temporarily waiving the century-old Jones Act, which requires goods transported between US ports to move on American-flagged vessels
• Energy Secretary Wright said the US Navy could begin escorting oil tankers through the Strait of Hormuz by the end of March
• Meanwhile, the New York Times reported that Iran may be preparing to lay naval mines in the Strait of Hormuz, though Defense Secretary Hegseth said the administration has not confirmed evidence of mining activity
• Regardless, tanker movements through the waterway have slowed dramatically since the war began on February 28, with vessel traffic now reduced to a small fraction of normal levels

Natural gas prompt month is up 0.7c to $3.24/MMBtu. (As of 07:30 AM CT)

• L48 supply flows have fallen -1.5 Bcf/d this week
• • Canadian imports have fallen -1.4 Bcf/d this week, and production has fallen -0.1 Bcf/d (Criterion)
• Forecasted demand came in lower today, as weather forecasts warmed across the L48 regions
• • Gains were particularly notable in the Midwest, which gained 28.7°F across the forecast period (Criterion)
• S&P forecasts demand to exceed the 10 year average early next week, before returning to below normal
• • Overall, the demand forecast range for mid to late march is below the normal by around -11 Bcf

Short to medium term LNG output forecast strengthens

• LNG feedgas demand is at 20.4 Bcf/d in early noms this morning, averaging 19.8 Bcf/d this week
• Pigging runs are scheduled for the Creole Trail next week, and outages at NGPL Station 302 are scheduled for April (Criterion)
• • Despite the pigging runs, LNG feedgas demand is still expected to rise next week
• Corpus removed all planned pigging runs scheduled for May

West Texas spot gas prices plunged to near-record lows as Pipeline maintenance pressured negative prices (S&P)