Crude Extends Gains as Tensions Remain Elevated; Gas Inches Up as Summer Starts Hotter Than Average

Crude extends gains as US-Iran tensions remain elevated

• The WTI prompt-month contract rose $2.67 to $96.43/Bbl on Wednesday morning (7:30 AM CT)
• Crude prices moved higher again after Iran launched strikes against US military facilities in Kuwait and Bahrain following a US attack on Qeshm Island, while US naval forces reportedly intercepted another sanctioned VLCC attempting to breach restrictions and reach an Iranian port
• • While tit-for-tat actions are continuing, both Washington and Tehran appear intent on preventing these incidents from derailing broader ceasefire negotiations or triggering a larger conflict
• On Tuesday, US Secretary of State Marco Rubio acknowledged that negotiations remain slow-moving, reinforcing expectations that a formal agreement may not be as close as some officials have indicated
• According to ABC News, President Trump is seeking written commitments from Iran on key nuclear-related concessions as part of an initial framework aimed at ending the war
• Bloomberg reported that open interest in Brent crude futures has fallen to its lowest level since August as heightened price swings have prompted market participants to reduce risk exposure
• • Open interest measures the number of outstanding futures contracts that remain open and have not yet been offset, settled, or delivered
• The API estimated US crude oil inventories declined by 6.8 MMBbl last week, before the release of official EIA inventory figures later Wednesday

Natural gas inches up on warming early in the forecast range

• Natural gas is up 0.7c to $3.174/MMBtu (As of 07:30 AM CDT)
• The Northeast warmed considerably in the 1-10 day range in today’s forecast, gaining 12.4°F over this range (Criterion)
• • CDDs are expected to hover over the 10-year average over the next 2 weeks, implying some higher-than-average cooling demand to start summer
• Feedgas ticked up off yesterdays recent lows to 17.4 Bcf/d

Southwest Power Pool faces resource adequacy concerns (S&P)

• In the 2025 State of the Market Report by the Market Monitoring Unit they identified resource adequacy concerns
• Low margins between accredited capacity and load obligations during summer peak periods could support increased demand for natural gas-fired generation