Oil Edges Higher Ahead of Trump's Iran Ultimatum

Crude climbs ahead of Trump deadline

• The WTI prompt-month contract rose $2.62 to $115.03/Bbl on Tuesday morning (7:30 AM CT)
• Futures moved higher as a deadline set by President Trump approaches, pressuring Iran to reopen the Strait of Hormuz
• • Trump escalated rhetoric, warning that “a whole civilization” could be at risk as the 8 PM ET deadline nears
• Tehran signaled it would retaliate against any escalation by targeting energy infrastructure across the Persian Gulf, increasing the risk of further supply disruption and tighter global fuel balances
• • Cal 2027 clears $70/Bbl as deferred crude reprices higher on persistent supply risk
• Iran has dismissed the US 15-point proposal and continues to question Washington’s intentions, viewing ongoing diplomatic efforts as cover for potential military escalation
• Analysts at Société Générale SA noted the market faces two paths: a fragile de-escalation scenario with gradual supply normalization, or a prolonged conflict that sustains elevated risk premiums and triggers aggressive stockpiling

Natural gas inches up amidst L48 production slip

• Natural gas is up 0.5c to $2.816/MMBtu (As of 07:30 AM CT)
• Production slipped 2.8 Bcf/d to a new two-week low of 108.6 Bcf/d (Criterion)
• • Production declines were centered in the South Central region, which lost over 2 Bcf/d
• Production declines combined with the short cold peak today have flipped the supply-demand balance to withdrawal temporarily
• Feedgas demand dropped 900 MMcf/d to a two-week low at 19.3 Bcf/d
• • The decline is due to NGPL CS 302 outage scheduled for all of April, compounded by pigging runs today and tomorrow at Creole Trail

US NRC renews licenses of California’s nuclear reactors through 2045 (S&P)

• Diablo Canyon provides about 10% of California’s electricity, decreasing it’s demand for gas powered electricity