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Daily First Look
Daily briefThomas Liardon

Crude Slides Ahead of 'Economic D-Day'; Gas Advances as the Northeast and Midwest Warm

Crude slides ahead of US “Economic D-Day” plan

  • The WTI prompt-month contract fell $1.57 to $85.49/Bbl Monday morning (7:30 AM CT)
  • Treasury Secretary Scott Bessent said the US is preparing to unveil a broader strategy aimed at economically isolating Iran and countries that continue doing business with Tehran
  • Bessent said Washington plans to coordinate with allies in an effort to impose unprecedented economic pressure, forcing countries to choose between maintaining ties with Iran and aligning with the US-led campaign
  • The latest threats have shifted attention toward China, one of Iran’s largest trading partners, as Beijing continues to reject Washington’s sanctions strategy and call for a diplomatic resolution
  • Meanwhile, Axios reported that roughly 40 vessels transited the Strait of Hormuz Friday night using a southern route close to the Omani coast
    • The vessels reportedly carried around 16 MMBbl of oil, equivalent to roughly 80% of typical prewar flows through the strait

Gas Advances as the Northeast and Midwest Warm

  • Natural gas is up 5.0c to $2.823/MMBtu. (As of 07:30 AM CDT)
  • Weather model shifts were mixed over the weekend, with the Northeast and Midwest Warming and the rest of the L48 cooling to offset
    • The most pronounced move was the Midwest, which gained over 20°F over the weekend across the forecast period
  • Cooling demand is taking a small break, with CDDs hovering around 12 this week, however they are expected to pick back up above 13 next week (Criterion)
  • LNG feedgas demand came in at 17.8 Bcf/d this morning, still affected by Golden Pass’s slow ramp up and Freeport's ongoing maintenance
    • Freeport hasn’t provided commentary on the status of their train currently offline, which was originally planned for completion this week
  • Whitewater FID on Solitude leads to largest jump in long-dated Waha Curve to date (NGI)
    • On the day of the FID, Waha basis tightened 7.6c to Henry Hub for the Oct 2029-March 2032 Long-dated strip
      • The price move reflects optimism around egress out of the Permian at the end of the decade

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