Crude Rises Amidst Fragile Ceasefire

Crude rises as markets assess fragile ceasefire prospects

The WTI prompt-month contract rose $1.10 to $89.30/Bbl on Wednesday morning (7:57 AM CT)
President Donald Trump warned Iran would face consequences if negotiations continue to stall, following another round of military exchanges between the two sides over the past 24 hours
- According to Iranian state media, US forces struck targets near the Strait of Hormuz, while Iran launched attacks against facilities in Bahrain, Jordan, and Kuwait
Shell CEO, Wael Sawan, warned the global oil market risks drawing down future supply availability as disruptions linked to the Iran conflict persist
- Sawan said the conflict and closure of the Strait of Hormuz have already removed roughly 1.2 BBbls from global supply balances, with the market potentially requiring up to a year to fully rebalance
The US Energy Information Administration, in its latest Short-Term Energy Outlook, projects oil flows through the Strait of Hormuz will begin normalizing during the third quarter of 2026
- However, the agency expects it could take several months for shipments to recover to pre-conflict levels as logistics networks and trade routes gradually return to normal operations

Natural gas is up as weather forecast warms back to the 10-year average

Natural gas is up 8.5c to $3.225/MMBtu (As of 07:57 AM CDT)

The L48 warmed close to 5°F this morning over the forecast range (Criterion)

There were significant weather gains in the Rockies and Midcon in the 6-15 day range (CWG)
There wasn’t any significant offsetting cooling elsewhere in the L48 forecast range

Power demand ticked up 2.5 Bcf/d to over 43 Bcf/d this morning

For the week ending June 12, Criterion expects the L48 to average 40.1 Bcf/d of power demand
Last year, the second week of June averaged 38.24 Bcf/d of Power demand, and in 2024 the second week of June averaged 31.74 Bcf/d (S&P)

US FERC approves 289 MMcf/d TTC gas pipe project, requiring open season (S&P)

US FERC granted authorization for the project on June 5 but said the developer must first hold an open season
The pipeline will supply gas to the Freeport LNG terminal via Gulf South Pipeline’s Coastal Bender Header System