Crude Climbs as Traders Weigh Future of US-Iran Ceasefire; Gas Pulls Back

Crude climbs as doubts grow around US-Iran ceasefire

• The WTI prompt-month contract rose $3.51 to $101.58/Bbl on Tuesday morning (7:30 AM CT)
• Oil futures moved higher after President Trump questioned the durability of the ceasefire with Iran and rejected Tehran’s latest proposal, keeping uncertainty around the Strait of Hormuz elevated
• According to Axios, Trump met with his national security team to discuss the conflict, including the possibility of renewed military operations
• The president is also scheduled to depart for China on Wednesday, with analysts suggesting any major military action against Iran would likely be delayed until after his return
• The Cal 2027 strip moved above $76/Bbl, reflecting growing expectations that disruptions tied to the US-Iran conflict could extend beyond 2026, with Trump’s comments that the US does not need to “rush anything” reinforcing the market’s view of a potentially prolonged standoff

Natural gas prompt gives back recent gains as late may weather forecast cools

• Natural gas is down -1.7c to $2.893/MMBtu (As of 07:30 AM CDT)
• Residual HDDs persist for a couple more days before dropping off by May 15
• • CDDs peak in this forecast range early next week around 6 before tapering back to the 3 CDD range (Criterion)
• L48 average storage week temperatures are expected to average 64.1

Despite the mild shoulder season, the overall potential volatility of markets remains

• US natural gas supply and demand have grown >40% over the last decade, while working capacity of storage has stayed mostly flat (Expand)
• The EIA will release its annual Underground Natural Gas Working Storage Capacity this month

Enbridge made FID on 25 Bcf expansion of Tres Palacios storage system in Texas

• Enbridge will add 3 new wells to the existing Tres Palacios site to add storage in 3 stages between 2028 and 2030
• • The storage system will support rising demand from LNG and power generation along the Gulf Coast
• The company now has almost 50 Bcf of storage capacity under development along the Gulf Coast