Crude Selloff Deepens as US-Iran Negotiations Continue; Gas Gains as Forecasted CDDs Rise

Crude selloff deepens as US-Iran negotiations continue

• The WTI prompt-month contract fell $5.42 to $88.47/Bbl on Wednesday morning (7:30 AM CT)
• WTI futures dropped below $90/Bbl after Ali Bagheri Kani, deputy secretary of Iran’s Supreme National Security Council, said Iran’s stockpile of highly enriched uranium is “not on the agenda” in talks with the US
• According to Bloomberg, at least two non-Iranian supertankers successfully transited the Strait of Hormuz on Tuesday
• • Despite the limited progress, the strait remains effectively restricted, with both US and Iranian forces continuing blockade activity in the region
• President Trump is set to convene his cabinet at the White House on Wednesday as key sticking points remain in negotiations with Iran, including Tehran’s $24 billion in frozen assets and disputes over free passage through the Strait of Hormuz

Natural gas is up as L48 mid-June temperatures continue to tick higher

• Natural gas is up 5.1c to $2.945/MMBtu (As of 07:30 AM CDT)
• Warming was lead by the south central, which gained 21.6°F over the forecast period (Criterion)
• • CDDs are expected to dip into the weekend before climbing close to 10 CDDs by the end of the forecast period
  • Storage week temperatures are expected to climb above 73°F by the week ending June 12

Overall PWCDDs are expected to fall below the 10-year normal this summer according to Platts

• As of May 21, Platts assessed June calling for PWCDDs to be 4% below the 10-year average
• • Above normal temperatures are expected in the Rockies and South-Central regions
• July was assessed as also falling slightly below the 10-year normal by 2%, with above normal temperatures primarily expected in the North Rockies region in Alberta