Crude Rebounds After Trump Rejects Iran's Hormuz Proposal; Gas Sells-off as MXP Force Majeure is Lifted

Crude rebounds after Trump rejects Iran’s Hormuz proposal

• The WTI prompt-month contract rose $2.44 to $94.85/Bbl Monday morning (7:37 AM CT)
• Crude moved higher after President Trump rejected an Iranian proposal to reopen the Strait of Hormuz within seven days in exchange for US concessions
• Tehran has maintained its support for the proposal, while Axios reported that the two sides expect to resume negotiations this week
• Providing some relief to physical markets, Saudi Arabia resumed exports through the East-West pipeline as flows reached roughly 3.5 MMBbl/d
• • The pipeline has 7 MMBbl/d of total capacity, though roughly 2 MMBbl/d typically supplies domestic refineries and the remainder is available for exports
• Trump also said he is considering a US diesel export ban “very seriously” as the administration faces pressure to lower domestic fuel prices
• • The White House is weighing other measures, including suspending fuel taxes and temporarily easing restrictions on the sale of dyed diesel

Gas moves down as Force Majeure is lifted on MXP

• Natural gas is down -13.1c to $3.065/MMBtu (As of 07:37 AM CDT)
• Columbia Gas Transmission notified customers that the Force Majeure on MXP was lifted yesterday
• Flows are starting to recover, with MXPSEG lifting to 553 MMcf/d as of this morning (Criterion)

Overall weekend weather changes were muted due to offsetting moves

• The South Central, Rockies, and West regions gained heat in the forecast this morning, however the Northeast and Midwest lost heat
• Overall, the L48 gained just 1°F over the forecast period
• Power and Rescom gained a little over 3 Bcf/d this morning, to 38.7 and 10.2 respectively
• • This marks week two for Power and Rescom being in the 40 Bcf/d and 10 Bcf/d ranges

US LNG feedgas demand moves over 19 Bcf/d on Gulf Coast Strength

• Corpus and Golden Pass gained over 600 MMcf/d combined, working to offset the continued losses at Cove Point due to maintenance