Crude Advances as Ceasefire Expires and Hormuz Tensions Escalate

Oil advances as ceasefire lapses without agreement

• The WTI prompt-month contract rose $1.20 to $90.87/bbl on Wednesday morning (7:30 AM CT)
• The ceasefire expired with no follow-up talks, as US and Iranian officials failed to convene in Islamabad for a second round of negotiations
• In the immediate aftermath, attacks were reported on three container vessels transiting the Strait of Hormuz
• • Iranian state media indicated two ships were seized by the IRGC, while a third was left disabled
• President Trump announced an extension of the ceasefire, while confirming the US would continue enforcing its naval blockade of the strait following the breakdown in discussions

JP Morgan analysts warn the US blockade could force Iranian supply offline, tightening the market further

• Iran has roughly 40 MMBbl of available onshore storage, and with additional volumes held on Iran-linked VLCCs in the Strait, the export window extends to roughly 26 days
• If exports remain fully disrupted, Iran would likely begin curbing production after ~16 days, with shut-ins rising toward ~1.9 MMBbl/d by around day 30

Natural gas inches up as total supply continues to pull back

• Natural gas is up 3.4c to $2.731/MMBtu (As of 07:30 AM CDT)
• L48 production stayed flat at the two-week low at 108.6 Bcf/d, however the 0.5 Bcf/d loss of Canadian imports pulled down total supply to a new low (Criterion)
• Rescom demand collapsed a further 4.3 Bcf/d today as temperatures warm past the 10-year average
• Further out in the forecast, temperatures are expected to hover around 60°F heading into early May
• • No CDDs are yet showing up in the two-week forecast

EQT’s Q1 earnings came out yesterday at close

• They reported strong FCF, debt reduction, and revenue growth (Qualtrim)
• Winter Storm Fern drove strong sales especially in the Appalachian region where they operate
• EQT continues to see 6-7 Bcf/d of in-basin demand growth through 2030, primarily from the power sector

Large Texas mega data center faces project delay as CEO is fired (NGI)

• Fermi America, an Amarillo data center, has a 10-year natural gas supply contract with Energy Transfer
• 300 MMcf/d of demand to fuel initial 2 GW, phase 1 is now expected in 2027