First Look: OPEC maintains demand outlook | LNG labor issues continue

WTI is trading lower, near $78.85, after strong inflation report
- The Producer Price Index rose 0.5% in April, compared to an estimate of 0.2% from Dow Jones
  - CPI inflation numbers for April will be released tomorrow
  - These indicators are closely watched as they help inform Federal Reserve interest rate decisions
OPEC maintains demand outlook (Reuters)
- In its latest report, OPEC said it would be sticking to its demand assumptions, expecting strong demand growth in 2024, while switching its focus to projected demand for OPEC+ crudes
- The group expects global oil demand to rise by 2.25 MMBbl/d in 2024 and by 1.85 MMBbl/d in 2025, unchanged from last month
- This is the last report before OPEC meets next month to discuss their supply policy for the remainder of the year
- OPEC also said it would cease publication of global demand for OPEC crude and instead focus on the demand for OPEC+ crude, which includes Russian supply
Asian refining margins remain weak (BBG)
- Refining margins in Asia are at the lowest level in seven months, turning crude buyers away from more expensive Middle Eastern grades and toward cheaper alternatives from the Americas
- Increases in the official selling price of Saudi Arabian crude has exacerbated issues for Asian refiners
- Saudi crude has largely been replaced by crude from the US and Brazil, which, even after adjusting for higher freight costs is cheaper than Middle Eastern barrels

Natural gas prices trade modestly lower, reversing some of yesterday's gains
- Yesterday, prices finished at $2.381/MMBtu—the highest since January 29—fueled by surging LNG demand and weak U.S. natural gas production
- June ’24 Henry Hub is down 3.3c this morning to trade around $2.348/MMBtu
- The Summer ’24 strip is down 4.9c to $2.560 and Winter ‘24/’25 strip is down 3c to $3.408
- Today’s Euro Ensemble indicates warming in most regions, especially the Midwest and Northeast, with temperatures expected to stabilize and then drop below the ten-year average by late May. (Criterion)
LNG labor issues continue with Sempra and Golden Pass developments (Criterion)
- Sempra is exploring options for a new EPC contractor for its Cameron LNG expansion due to tight labor market and rising project costs, employing Bechtel for value engineering
- McDermott previously worked on the currently operational Cameron LNG site
- At the Golden Pass LNG site, Zachry reportedly recalled some furloughed workers to return to work yesterday, specifically for Trains 2 and 3, after a temporary halt last week
East Texas natural gas prices rise amid increased demand; potential pressures loom (S&P Global)
- Cash prices rose yesterday due to increased feedgas demand at Freeport LNG, with Houston Ship Channel reaching $1.68/MMBtu from below 50c/MMBtu in mid-April
- The near full-service resumption of the Permian Highway Pipeline this week may exert downward pressure on natural gas prices