Crude Dips as Iran Delivers Proposal to US

Crude dips as Iran delivers new proposal to US

The WTI prompt-month contract declined $2.21 to $102.86/Bbl on Friday morning (7:30 AM CT)
Iran has submitted its response to the latest US revisions to a potential war-ending agreement, delivered via Pakistani intermediaries, according to Axios
ConocoPhillips warned that supply tightness is approaching a critical point, with shortages for some import-reliant countries likely as early as June, CFO Andy O’Brien said
- “We are going to start to see some import-dependent countries potentially begin facing acute shortages as we move into the June–July timeframe,” he said
- Higher prices could begin to erode demand as end-users scale back consumption or defer purchases
US crude exports climbed to a fresh record last week as international buyers continue seeking alternatives to disrupted Middle East supply
- Exports surpassed 6 MMBbl/d, exceeding the prior peak of roughly 5.3 MMBbl/d recorded in late 2023, according to the EIA
- Strong export flows alongside domestic inventory draws have potentially helped tighten the disconnect between physical and paper markets
According to Bloomberg, the US Department of Energy is offering up to 92.5 MMBbl from the Strategic Petroleum Reserve as part of a broader International Energy Agency-coordinated effort to ease supply disruptions tied to the Iran conflict
- The volumes would be made available through an exchange mechanism, allowing companies to borrow crude now and return it to the SPR by 2029

Natural gas inches up with some late season cooling

Natural gas is up 2.4c to $2.791/MMBtu (As of 07:30 AM CDT)

Rescom added nearly 2 Bcf/d of demand this morning as temperatures cooled across the L48

Weather forecast changes were minimal this morning, as temperatures slightly warmed 4.2°F late in the forecast period (Criterion)

L48 CDDs showed up in the forecast period in mid-May

The EIA released its weekly natural gas storage report yesterday showing a 79 Bcf Injection, which was roughly in line with analyst expectations

Storage, at 2,142 Bcf, is at a surplus to last year and the 5 year average, demonstrating a relatively loose market heading into Summer months

Seasonal maintenance constrains both LNG feedgas demand and dry gas production (NGI)

Production continues to sit below 110 Bcf/d as weak prices incentivize pipeline maintenance
LNG feedgas sits below 19 Bcf/d, as NGPL CS 302 outage is extended through May 15