Oil Declines as Diplomacy and Hormuz Flows Return

Oil declines as diplomacy and rising Hormuz flows ease supply concerns

The WTI front-month contract fell $2.51 to $96.79/Bbl Monday morning (7:30 AM CT)
The New York Times reported that the Trump administration had prepared to launch airstrikes against Yemen’s Houthis on Sunday following requests from Saudi Crown Prince Mohammed bin Salman, but President Trump canceled the operation shortly before it was set to begin
Trump also told Fox News that he would “probably” be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the UN General Assembly in New York this week
Saudi oil loadings from inside the Persian Gulf increased sharply over the weekend, providing the clearest indication yet that the kingdom has redirected exports toward the Strait of Hormuz per Bloomberg
Admiral Brad Cooper, head of US Central Command, said crude and LNG flows through Hormuz reached a six-month high over the past two weeks, signaling that US naval escorts and mine-clearance efforts are “paying off”

Gas falls as power and LNG demand drop

Natural gas is down -6.5c to $2.847/MMBtu (As of 07:30 AM CDT)

Power demand continues lower this morning, down to approximately 42 Bcf/d

Production dipped over the weekend, down 1.3 Bcf/d to 111.9 Bcf/d (Criterion)

Appalachia led production losses at 1.0 Bcf/d

Appalachian production is at 34.8 Bcf/d this morning, down around 1.5 Bcf/d from the range it trended throughout summer
These lower volumes are likely a result of price related curtailments that producers warned about in earnings calls last month

Cove point goes down for maintenance, leads L48 feedgas demand lower

Cove point went almost completely down for maintenance, down 854 MMcf/d in noms this morning (Criterion)
There were also losses at Corpus and Cameron LNG, with Freeport and Golden Pass offsetting some losses
- Feedgas demand is now at 18.3 Bcf/d