Crude Jumps as Trump Escalates Economic Pressure on Iran; Gas Falls as Forecasts Pull Back Sharply

Crude jumps as Trump escalates economic pressure on Iran

• The WTI prompt-month contract rose $3.05 to $88.88/Bbl Thursday morning (7:30 AM CT)
• President Trump announced what he called an “ECONOMIC D-DAY” against Iran, signaling a sharp escalation in efforts to pressure Tehran financially as the conflict continues to restrict Middle East energy flows
• • Trump also threatened consequences for countries that continue doing business with Iran, although details surrounding the potential measures remain limited
• With traffic through the Strait of Hormuz still constrained, Axios reported the US military is helping move roughly 10 MMBbl/d through the region, though analysts estimate actual flows through the waterway remain well below that level
• Shipping risks also extended beyond Hormuz after the UK Maritime Trade Operations reported that a tanker was hijacked roughly 136 nautical miles east of Yemen and redirected toward Somalia
• “In this headline-driven environment, the latest Trump salvo is driving prices higher,” said Tamas Varga of PVM Oil Associates

Gas falls as temperature forecasts pull back sharply

• Natural gas is down -5.7c to $2.757/MMBtu. (As of 07:45 AM CDT)
• Temperature forecasts declined broadly east of the Rockies, with early September looking cooler than August
• • The L48 is expected to fall by a rough average of 3°F by the week ending 9/4
  • This translates to a loss of 3 daily CDDs by the end of the forecast range
• Power burn fell 600 MMcf/d this morning to 50.4 Bcf/d
• Supply pulled back sharply, with L48 dry gas production falling 1.3 Bcf/d to 110.9 Bcf/d

Feedgas demand gains off lows

• Feedgas demand rose about 400 MMcf/d this morning to 17.9 Bcf/d, led by the return of Freeports Train 3, which tripped unexpectedly (Criterion)
• • They returned to 2 trains this morning, still undergoing maintenance as 1 train remains down
• Golden pass continues slow ramp up, nominating for 543 MMcf/d this morning