Crude Falls as Reported Discussions Involve Phased Reopening of Strait

Crude falls as market assesses prospects for a US-Iran agreement

• The WTI prompt-month contract dropped $4.55 to $90.53/Bbl on Thursday morning (7:30 AM CT)
• Saudi-linked media outlet Al Arabiya reported that discussions may involve a partial easing of the US blockade alongside a phased reopening of the Strait of Hormuz
• Bloomberg reported that Iran is preparing to deliver its latest response through Pakistani intermediaries within the next two days
• In the US, exports of refined petroleum products climbed to a record last week as global buyers sought replacement fuel supplies amid disruptions tied to the US-Iran conflict
• • The EIA reported total product exports reached 8.2 MMBbl/d
• US inventories of distillates, including diesel, remain at their lowest seasonal level since 2005, while gasoline inventories also continue to trail historical norms
• • According to AAA, the national average gasoline price climbed above $4.50/gal on Tuesday, the highest since July 2022, while diesel prices surged to roughly $5.67/gal

Natural gas falls as late May temperatures show accelerating cooling demand

• Natural gas is down -3.6c to $2.694/MMBtu (As of 07:30 AM CDT)
• Temperatures fell in the forecast range, but with the outlook flipping to CDDs by May 15, this will start to be interpreted as bearish
• Storage week temperatures are expected to gain roughly 7°F over the next to weeks by 5/22 to 67.5°F (Criterion)
• L48 feedgas demand continues to be depressed due to maintenance, sitting below 18 Bcf/d

The EIA will release its weekly natural gas storage report today, with Bloomberg survey showing a median expectation of 72 Bcf injection for the week ending May 1

Cheniere has received approval to introduce feedgas at Corpus Chirsti LNG’s Train 6 (S&P)

• This is expected to add 210 MMcf/d of feedgas demand from West Texas hubs at peak capacity (NGI)