Crude Falls after Reports of Expected Islamabad Talks

WTI falls on news of potential peace talks

• WTI is up $0.38 to $96.27/bbl this morning (7:52 AM CDT)
• Oil prices fell this morning after Pakistani officials stated talks are expected
• • Iranian Foreign Minister Abbas Araghchi is expected to arrive in Islamabad late Friday for talks with US officials already present
• A US sanctioned Iranian supertanker, the Yuri, halted its transit through Hormuz (Bloomberg)
• • This comes after two Iranian tankers have been intercepted earlier this week, suggesting Iranian wariness to test the blockade
• Oil output from Persian Gulf has been 14.5 MMBbl/d below prewar levels (Goldman Sachs)
• • The longer the strait is closed, the slower the production recovery is likely to be

Trump announced the Israel Lebanon Ceasefire has extended 3 more weeks, helping to ease tensions in the broader region

Natural gas falls further as early May temperatures look warmer

• Natural gas is down -5.4c to $2.56/MMBtu (As of 07:30 AM CDT)
• The L48 weather forecasts were stable in the 1-10 range, but the 11-15 day range is looking warmer, in line with the 10 year average around 62.5°F (Criterion)
• • There will be some mild cool weather next weekend, after which it’s expected to warm again
• L48 production bounced back slightly, up 0.4 Bcf/d to 108.9 Bcf/d (Criterion)

The EIA reported an actual storage build of 103 Bcf/d yesterday for the week ending 4/17

• Inventories for the US are now at a surplus of 142 Bcf to last year, and 137 Bcf to the five-year average
• Weather demand has been relatively weak this year, more than offsetting improvements in structural demand like LNG, Pipe loss, and Exports