First Look: Oil tankers idling in the North Sea indicating weak demand

Oil prices are up more than $1 to $79.10 after geopolitical risk premium rises over the weekend
- Israeli troops clashed with Egyptian border guards, resulting in the death of one of the Egyptian soldiers, while Israel launched large airstrikes against Gaza
- OPEC will be meeting this Sunday to discuss the future of their supply reduction policy and decide whether to extend production cuts through the end of 2024
  - Many analysts, including the International Energy Agency, expect an extension of the OPEC cuts
  - If the production cuts are extended, the global oil market is expected to remain undersupplied through year-end
Oil tankers idling in the North Sea indicating weak demand (BBG)
- Three tankers carrying Forties crude have been sitting off the coast of Europe for more than two weeks now, potentially indicating weak demand
- This is the first time in more than two years that cargoes of this crude grade have idled at sea, as tankers normally go directly to refineries after loading
- The European market appears to be oversupplied with oil, as flows from the US Gulf Coast have increased, and refinery demand in Europe has been sluggish
- Asian buyers have also been well-supplied by WTI and Murban crudes, which compete with Forties

Natural gas prices trade modestly higher ahead of June '24 contract expiry
- June ’24 Henry Hub is up 1.4c this morning to trade around $2.534/MMBtu
- The Summer ’24 strip is down 1.8c to $2.775 and Winter ‘24/’25 strip is down 6.3c to $3.538
- Today’s Euro Ensemble indicates a warming trend, especially in the Northeast, Rockies, and West, with peak heat expected next week and continuing into mid-June (Criterion)
Golden Pass LNG work continues despite EPC contractor Zachry’s bankruptcy (OG&J)
- Golden Pass LNG is progressing on its 18 Mtpa liquefaction project with McDermott International and Chiyoda International Corp after Zachy's Chapter 11 bankruptcy filing
- The project is 75% complete, and Golden Pass is committed to its completion despite the departure of Zachry as lead contractor due to financial strains caused by COVID-19 and geopolitical issues
- Zachry is seeking a structured exit from Golden Pass but continues to serve other customers, including Venture Global for its 20 Mtpa Plaquemines LNG plant