Crude Prices Whipsaw as Trades Assess Shifting Risks

Crude prices whipsaw as traders assess shifting US-Iran risks

The WTI prompt-month contract rose $0.23 to $82.72/Bbl on Monday morning (7:40 AM CT)
WTI futures pulled back after Reuters reported that international mediators had proposed a 10-day pause in hostilities between the US and Iran, raising hopes for a temporary easing of tensions
Prices later recovered after Yemen's Houthi movement announced plans to prohibit maritime traffic originating from Saudi Arabia, renewing concerns over potential disruptions to Red Sea shipping
According to Bloomberg, Iranian attacks on commercial vessels and an expanding US military campaign have effectively brought tanker traffic through the Strait of Hormuz to a near standstill
- Iran's navy said on Sunday it intercepted four unidentified vessels attempting to transit what it described as an "unsafe route" through the Strait after ignoring repeated warnings
- The navy said two vessels were forced to stop after encountering "accidents," while the remaining two abandoned the transit and reversed course

Gas falls as Canadian imports dry up

Natural gas is down -2.0c to $2.891/MMBtu (As of 07:40 AM CDT)

The largest fundamental shifts in the gas market over the weekend were on the supply side

L48 production shifted 0.7 Bcf higher lead by the South Central and GOA regions (Criterion)
Canadian imports fell around 1 Bcf this morning lead by decreased import flows into the MidCon

Demand held mostly flat since Friday, exhibiting small ticks higher across most types of demand (Criterion)

The L48 was split in half on weather changes, with the West and South warming considerably and the Northeast and Midcon cooling

Storage in the Northeast and Midwest started injection season considerably below the 5-year average, but high production and mostly mild shoulder and summer temperatures have raised both over the average
Mountain and Pacific storage remain at or near 5-year highs