Crude Steady as Tensions Flare in the Gulf; Gas Inches Up as Cooling Demand Accelerates

Crude steady despite renewed strikes in the Gulf

• The WTI prompt-month contract edged up $0.02 to $94.83/Bbl on Friday morning (7:30 AM CT)
• Oil prices were largely stable Friday morning despite the first direct exchange between US and Iranian forces since the ceasefire was implemented
• • US Central Command said American forces struck Iranian military assets after Tehran allegedly targeted three US destroyers operating near the Strait of Hormuz
• Even with renewed military activity, both Washington and Tehran appear hesitant to escalate into a broader conflict, with futures markets still reflecting expectations that negotiations could eventually resume
• • Iran’s response to the latest US proposal aimed at ending the conflict remains under consideration, according to Foreign Ministry spokesman Esmail Baghaei speaking to the semi-official Tasnim news agency
• On the demand side, disruptions to Persian Gulf energy flows for more than two months are beginning to erode accumulated inventories, raising concerns that sustained high prices and potential government measures could eventually weigh on global fuel consumption
• • Morgan Stanley reduced its second-quarter global oil demand forecast by 3.7 MMBbl/d

Natural gas Inches up as cooling demand picks up late in the forecast range

• Natural gas is up 2.2c to $2.791/MMBtu (As of 07:33 AM CDT)
• The L48 has one more mild shot of cooler weather next week before entering CDD territory
• The EIA reported an actual injection of 63 Bcf yesterday, short of the median estimate of 72 Bcf
• • Storage Injections should re-accelerate for the week ending today, as weather driven demand fell from the prior week
• Criterion predicts a 1.5 Bcf/d recovery in feedgas demand next week driven by the recovery of Corpus Christi LNG

Corpus Christi LNG sixth liquefaction train to produce first LNG in coming days (NGI)

• More efficient liquefaction trains and faster expansion at Corpus Christi also prompted the company to increase its LNG production forecast by 1 Mt this year (133 MMcf/d)
• Cheniere loaded 187 LNG cargoes in Q1, a record high