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Daily First Look
Daily briefThomas Liardon

Crude Extends Rally as Gulf Shipping Risks Intensify

Crude advances as Gulf conflict expands

  • The WTI prompt-month contract rose $1.73 to $84.96/Bbl on Tuesday morning (7:30 AM CT)
  • The US carried out a 10th consecutive day of strikes against Iran as Tehran continues targeting tankers transiting the Strait of Hormuz
    • According to EOS Risk Group, the vessel struck was an oil products tanker operated by Kuwait Oil Tanker Co.
  • Yemen's Houthi forces expanded the conflict by announcing a blockade on Saudi maritime traffic in the Red Sea, increasing risks to Gulf energy exports
    • Saudi Arabia has shifted more crude exports through Yanbu, its primary Red Sea terminal, leaving roughly 2.5 MMBbl/d of exports exposed to potential Houthi attacks, according to Rystad Energy
    • The Houthis warned that vessels conducting business with Saudi ports "may be subject to targeting in any location within the operational reach of the Yemeni Armed Forces"
  • The Bal 2026 strip rose above $80/Bbl, while the Cal 2027 strip is trading above $72/Bbl

Gas ticks higher as power demand surges

  • Natural gas is up 0.1c to $2.861/MMBtu (As of 07:30 AM CDT)
  • Power demand picked up over 3 Bcf/d this morning to over 50 Bcf/d (Criterion)
    • This translated to CDDs picking up from 13 yesterday to 15 today
  • Forecasted temperature changes experienced another day of large, offsetting shifts
    • The Northeast and Midwest cooled further, offsetting gains in the South Central and Rockies
  • Bertha upgraded to Tropical Storm, forecasted to move westward
    • The tropical storm is unlikely to impact gas supplies; however, it poses risk to LNG cargo and slight risk to cooling demand on the gulf coast (NGI)
  • Cheniere moves closer to production start on Corpus Christi LNG Train 7 (S&P)
    • The company received permission from US regulators July 17 to introduce feedgas to its seventh train
      • The unit is expected to achieve first LNG production by mid-August and reach substantial completion around mid-September

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