Crude Rises as New Supply Risks Come Into Focus; Gas Flat as East Cooling Grapples with Western Heat

Crude rises as traders assess mounting supply risks

• The WTI prompt-month contract gained $1.62 to $85.21/Bbl Friday morning (7:30 AM CT)
• The Caspian Pipeline Consortium (CPC) is expected to decide later Friday whether to suspend operations indefinitely, potentially disrupting Kazakhstan’s primary crude export route
• • Bloomberg reports the terminal has handled roughly 1.8 MMBbl/d in recent months, predominantly Kazakh crude, while tanker activity near the port has already declined following Ukrainian attacks
• A shutdown of the CPC terminal would compound existing supply concerns as the market contends with restricted flows and heightened shipping risks around the Strait of Hormuz and Bab el-Mandeb
• Meanwhile, oil-transfer operations through Hormuz have accelerated following a recent slowdown, allowing more barrels to leave the Gulf despite escalating hostilities
• • Bloomberg satellite data and commentary point to an increase in outbound vessel traffic with buyers of Gulf-origin crude beginning to receive cargoes that had previously been delayed

Gas flat as cooling in the East offsets warming in the West

• Natural gas is up 0.8c to $2.766/MMBtu (07:30 AM CDT)
• The Midwest lost 22.7°F across the forecast period (Crtierion)
• The Midwest, especially in major population centers around Chicago, are forecast to be cooler than the 10-year average almost every day throughout the forecast period (CWG)
• • The Western US is the opposite, with much of the West coast and Rockies experiencing temperatures 4-8°F higher than the 10-year average

NextDecade maintains first gas to Rio Grande LNG by late-2026 (Criterion)

• The facility is expected to receive first gas late this year, and achieve first LNG in 1H27

The EIA reported a 28 Bcf build in US working gas storage yesterday

• This was lower than the lowest analyst estimation of 33 Bcf
• Inventories are now at a deficit of 32 Bcf to last year and surplus of 185 Bcf to the five-year average
• • Nearly 350 Bcf of new US L48 storage capacity is planned in 2026-2030, most of which coming as Salt dome storage in the South Central (S&P)