Crude Steady as US-Iran Talks Remain in Focus; Gas Falls as Demand and Storage Risks Compound

Oil holds steady as US-Iran talks remain in focus

• The WTI prompt-month contract is up $0.20 to $72.28/Bbl on Friday morning (7:30 AM CT)
• According to US officials, technical talks between the US and Iran are continuing following the two days of clashes that threatened to shatter the memorandum of understanding
• Uncertainty over the future of US-Iran talks has increased as both sides have accused one another of violating the ceasefire injecting renewed geopolitical risk back into crude futures
• The International Energy Agency said renewed hostilities between the US and Iran risk derailing efforts to rebuild depleted global oil inventories later this year
• • However, the escalation “clouds the outlook and could upend the forecast that sees the market flipping to surplus next year”
  • The agency’s latest report forecasts surplus builds of 4.6 MMBbl/d in 2027

Gas Continues Decline as Cooling Trend Compounds LNG Outages

• Natural gas is down -4.0c to $2.972/MMBtu (As of 07:30 AM CDT)
• L48 weather forecasts cooled around 10°F this morning
• • Peak demand is still expected at around 18 CDDs on July 16, but a larger tapering is expected after that date now (Criterion)
• Power demand fell from near yearly highs by over 1 Bcf/d to 46 Bcf/d
• Production and Canadian imports fell this morning, bringing total supply down to just under 116 Bcf/d (Criterion)

Freeport LNG to begin major maintenance today

• Given 1 train ran a turnaround from May 13 to June 11, Criterion expects this to cover the remaining two liquefaction trains sequentially
• Overall LNG feedgas nominations fell 485 MMcf/d today to 17.5 Bcf/d, led by Freeports 509 MMcf/d fall

L48 storage injection were reported at 61 Bcf for the week ended July 3

• This eclipsed the five-year average of 51 Bcf as well as market expectations