Crude Jumps Again as US Signals Prolonged Naval Blockade

Crude jumps again as US signals prolonged naval blockade

• The WTI prompt-month contract rose $3.86 to $103.79/Bbl on Tuesday morning (7:30 AM CT)
• President Trump has directed aides to prepare for a longer-lasting naval blockade of Iranian ports, according to the Wall Street Journal
• The blockade is intended to intensify pressure on Tehran, as the country nears storage capacity limits, raising the risk of forced production curtailments, per Kpler
• • Kpler estimates Iran has roughly 12 to 22 days of remaining storage capacity
• The US is also escalating financial pressure, with the Treasury Department’s Office of Foreign Assets Control warning banks and firms of potential sanctions exposure tied to Chinese refiners with Iranian links
• Despite the ceasefire holding, both sides are shifting toward economic leverage, with Iran maintaining tight control over the Strait of Hormuz and moving to formalize a fee-based transit system for vessels

Natural gas June contract is down as contract rolls

• Natural gas is down -5.1c to $2.64/MMBtu (As of 07:32 AM CDT)
• The May Henry Hub contract settled yesterday at $2.559/MMBtu
• The cooling into this weekend begins today, as 2 Bcf/d of rescom demand was added back (Criterion)
• Weather forecasts came in warmer, erasing some of the cooling momentum in the back half of the forecast range over the last couple of days
• • Warming was primarily centered in the northeast and west regions

Appalachian gas output slides to 11-week low

• Since December, Appalachian production has slumped 1.9 Bcf/d to 34.3 Bcf/d (S&P)
• The production dip is in response to the lower shoulder prices
• • EQT acknowledged on their earnings call that they were actively curtailing volumes