Race to the Moon: WTI vs. Artemis II

WTI lifts off post Trump speech

• The WTI prompt-month contract ripped $12.50 higher to $112.62/Bbl as of Thursday morning (7:51 AM CT), moving right alongside Artemis II
• President Trump signaled a further escalation in the conflict with Iran in the weeks ahead
• The rally followed Trump’s address, where he maintained that ongoing US strikes over the next two to three weeks would lead to the Strait of Hormuz “naturally” reopening
• • French President Emmanuel Macron cautioned that reopening the strait through military force may not be a realistic outcome
• The front of the curve remains deeply backwardated, but strength is also extending further out, with WTI Cal 2027 up more than $1 and approaching $70/Bbl; absent a recovery in transit through the strait, supply pressures are unlikely to ease in the near term
• “Trump’s remarks do not change the core market dynamic: the Strait has effectively been shut for weeks, flows are still constrained, and disruptions are expected to persist for some time,” said Rennie, head of commodity research at Westpac Banking Corp

Natural gas is up $0.032/MMbtu to $2.851/MMbtu this morning (7:49 AM CT)

• Weather models have been consistent this week, with relatively low volatility in day to day forecast changes
• HDDs will peak next week around 12 before cooling off again below the 10 year normal (Criterion)
• • Even at peak cold next week, HDDs won’t be enough for Rescom demand to significantly pass Power demand (S&P)
• Production is near a two-week low at 110 Bcf/d after a sharp -730 Bcf/d pullback this morning
• The EIA will release its weekly natural gas storage report today, with Bloomberg survey showing a median expectation of a 37 Bcf injection

Golden pass secures FERC approval for loadings

• Golden pass ramped up commissioning this morning to 433 MMcf/d as they secured approval to begin loading cargoes
• Overall L48 LNG feedgas demand is flat in the range of 20.3 Bcf/d