Crude Climbs Into Weekend as Conflict Intensifies; Gas Steady on Stable Weather

Crude climbs into weekend as US-Iran conflict intensifies

• The WTI prompt-month contract rose $2.07 to $81.02/Bbl on Friday morning (7:30 AM CT)
• • The US carried out a sixth consecutive night of airstrikes on Iran, expanding its campaign to include bridges and a major rail junction in southern Iran, raising concerns that the conflict is moving closer to critical energy infrastructure
• Iran retaliated with missile strikes targeting US military bases in Kuwait, Jordan, Bahrain, and Oman, with Kuwaiti officials reporting damage to a water desalination and power generation facility
• Maritime tensions also escalated after Iran attacked another commercial tanker believed to have been transiting the Omani shipping corridor, according to the UKMTO
• Despite the heightened military activity, analysts believe crude prices may struggle to extend gains unless the conflict directly disrupts energy infrastructure
• • Iran would likely encourage Yemen's Houthi forces to intensify attacks on commercial shipping if the US expands its campaign to target Iranian energy infrastructure

Gas steady on stable weather forecast

• Natural gas is up 1.7c to $2.875/MMBtu
• The L48 weather forecast lacks much volatility, with average temperatures hovering in the high 70s for the next two weeks
• There was 0 overall change to the forecasted average temperature over the next two weeks, as warming in the West offset cooling in the East (Criterion)

Mexican exports are expected to gain over the forecast period

• Mexican exports are currently sitting at 7.8 Bcf/d, nearly 1 Bcf/d off recent highs
• As cooling demand picks back up across northern Mexico, the forecast rebuilds toward 8.3 Bcf/d