Crude Loses Momentum on Deal Optimism; Gas Falls as Midwest Cools and Blackcomb Commissioning Begins

Crude loses momentum on US-Iran deal optimism

• The WTI prompt-month contract fell $2.66 to $77.68/Bbl Tuesday morning (7:45 AM CT)
• Qatar said draft terms for a potential short-term agreement between the US and Iran are being exchanged between the two sides
• US Treasury Secretary Scott Bessent added to the optimism, telling CNBC that “there is a chance we may have a deal, today or tomorrow”
• However, a deal remains far from certain as Iran’s foreign minister said no direct talks with the US are currently planned, leaving questions about when shipping routes could reopen
• Traders are weighing the lower risk of further fighting against continued supply tightness, as traffic through Hormuz remains well below normal levels
• • Bloomberg reported limited activity on Monday, with only six smaller vessels crossing the strait in either direction

Gas falls as forecasted Midwest cooling demand weakens

• Natural gas is down -7.0c to $2.711/MMBtu (As of 07:30 AM CDT)
• L48 forecast changes were split, with the Rockies and South Central regions gaining a combined 20°F over the forecast period and the Midwest losing an offsetting 23°F (Criterion)
• • Chicago, for example, now doesn’t have a high above 85°F in the forecast range

Blackcomb gas pipeline starts flowing (Enbridge)

• Permian egress is getting another boost, as Blackcomb pipeline has started commissioning gas on July 31
• CEO of Enbridge said in the earnings call that they are on track to bring the 2.5 Bcf/d pipeline online by year-end