Crude Eases as Market Balances Reopening Uncertainty

Crude eases as markets balances geopolitical risks and reopening uncertainty

The WTI prompt-month contract fell $1.10 to $91.06/Bbl on Tuesday morning (7:30 AM CT)
Prices rallied on Monday after reports that Iran had suspended communications with the US, citing Israel’s expanded military operations in Lebanon as a violation of ceasefire understandings
President Trump later stated that Israel and Hezbollah had agreed to halt hostilities, Israeli forces had scaled back operations around Beirut, and a memorandum of understanding with Iran to facilitate the reopening of the Strait of Hormuz could be reached within the coming week
Participants at an OPEC technical meeting cautioned that a return to pre-conflict operating conditions would likely take several months, even if transit through Hormuz resumes in the near term
Paul Bloxam of HSBC Holdings warned that global oil inventories could approach critical functional levels, increasing the risk of sharper price volatility and potential supply shortages if disruptions persist
The Bal 2026 and Cal 2027 strips were trading near $84/Bbl and $74.50/Bbl, respectively

Gas slips as weather forecasts hold steady and Sabine Pass feedgas falls

Natural gas is down -4.6c to $3.133/MMBtu (As of 07:30 AM CDT)

Weather forecast changes were minimal, with the curve still expected to climb to around 75°F in mid-June (CWG)

Feedgas flows fell nearly 450 MMcf/d to 17.1 Bcf/d this morning

Sabine continues to lead losses amidst known feeder pipeline outages (Criterion)

Proposed Mexican LNG facility eyes Permian exports (NGI)

Amigo LNG advances toward buildout, planning to add a little over 1 Bcf/d of export capacity in Guaymas, Sonora
- The project would source US natural gas from the Permian Basin
Amigo selected UAE-based Dubai Drydocks world to develop the LNG vessel, and signed a 20-year sales and purchase agreement with International Resources Holding
- These business milestones increase the chances of FID
Northern Natural Gas seeks FERC approval for 0.35 Bcf/d Permian expansion (S&P)
- The expansion project will provide firm transport service via a 15-mile lateral pipeline from a new compressor station to a new delivery point in Gaines County