Crude Tumbles as US-Iran Hostilities Temporarily Ease; Gas Falls as Early August Weather Cools

Crude tumbles as US-Iran hostilities temporarily ease

• The WTI prompt-month contract fell $5.29 to $84.02/Bbl on Monday morning (7:46 AM CT)
• After 13 consecutive nights of strikes intended to limit Iran’s ability to threaten commercial shipping, the US appears to have paused its military campaign since late Friday
• • US Ambassador to the United Nations Mike Waltz said President Trump was allowing diplomatic efforts “some space”
• Iran also refrained from further retaliation and held discussions with Oman regarding the Strait of Hormuz
• However, Iranian Foreign Ministry spokesman Esmail Baghaei maintained that no formal negotiations are currently underway
• Crude loadings also restarted at the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast, the primary export route for Kazakh oil
• Meanwhile, Yemen’s Houthis said they targeted facilities associated with Saudi Arabia in Jizan and Yanbu over the weekend
• Crude prices declined across the forward curve, with the Bal 2026 strip falling back below $80/Bbl while Cal 2027 traded near $71.60/Bbl (7:45 AM CT)

Gas prompt sells off as L48 early August forecast cools

• Natural gas is down -9.7c to $2.774/MMBtu (As of 07:46 AM CDT)
• The L48 cooled 14°F overall over the weekend (Criterion)
• • Losses were concentrated in the Northeast and Midwest, both losing north of 17°F in the 1–5-day range
• This El Niño isn’t your typical El Niño, as it is breaking records against other super cases like 2015 and 1997, with key central Tropical Pacific already well above the +2.0°C super threshold (Criterion)
• • Some subsurface anomalies are warmer than 9°C above normal
  • • Super El Niño temperatures are associated with warmer winter temperatures in key demand areas in the L48 in the Northeast and Midwest
  • Similar to July, the L48 August CDD estimate is tracking slightly hotter than the 10-year average

US sets all-time electric output record of 101,391 GWh (S&P)

• The US electric output was 101,391 GWh for the week ended July 18, surpassing the record set two weeks earlier