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Daily First Look
Daily briefThomas Liardon

Crude Rallies as Iran Refuses to Give Up Uranium; Gas Inches Up as Production Slips

Crude rallies as Iran refuses to give up uranium

  • The WTI prompt-month contract rose $2.40 to $100.66/Bbl on Thursday morning (7:30 AM CT)
  • Reuters reported that Iran’s Supreme Leader, Ayatollah Mojtaba Khamenei, has banned the transfer of Iran’s enriched uranium stockpile to any location abroad
  • The report adds the directive was issued over fears that sending the uranium abroad would leave the country more exposed to future attacks by the US and Israel
  • The semi-official Iranian Students’ News Agency reported that Tehran is in the process of responding to the latest proposal by the US which “has narrowed the gaps to some extent”
    • However, both parties have been unwilling to give any concessions on nuclear capabilities and enrichment
  • Meanwhile, global oil liquid stockpiles are being drawn down at a record pace in May according to Goldman Sachs
  • Analysts noted visible inventories shrank by a record 8.7 MMBbl/d so far in May, nearly double the average since the conflict began
  • Domestically, US crude inventories, including the Strategic Petroleum Reserves, fell by a record 17.8 MMBbls last week

Natural gas inches up as production slips

  • Natural gas is up 0.7c to $3.011/MMBtu (As of 07:30 AM CDT)
  • Dry gas production fell 0.5 Bcf/d this morning to 108.1 Bcf/d led by production losses in the Northeast (S&P)
  • L48 power demand slipped 3.4 Bcf/d this morning to just above 33 Bcf/d
    • The demand outlook flattens out near 101-105 Bcf/d through the next two weeks as rescom rolls off into June (Criterion)
  • LNG feedgas extended its rebound this morning, climbing 490 MMcf/d to 18.3 Bcf/d
    • The rebound was led by a reawakening at Golden Pass this morning as it jumped from 4 MMcf/d to 204 MMcf/d (Criterion)
  • The EIA will release its weekly natural gas storage report today with Bloomberg showing a median expectation of a 96 Bcf build in storage
  • Kinetik reaches FID on King’s Landing complex expansion
    • King’s Landing II processing plant received a 100 MMcf/d capacity increase from the initial proposal up to 300 MMcf/d
    • Kinetik’s system-wide processing capacity is expected to exceed 2.7 Bcf/d of gas upon completion of the Kings Landing II project in 2H28 (S&P)

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