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First Look - Oil gains as trade tensions ease with 90-day tariff cut

US and China agree to 90-day tariff reduction
- China will lower tariffs on US goods to 10%, down from a peak of 125%, while the US will cut its tariffs on Chinese imports to 30%, down from 145%
- WTI prompt-month futures rose $2.38 to $63.40/Bbl early Monday (7:30 AM CT) following the announcement
- Commodity markets have remained volatile since President Trump first announced reciprocal tariffs in April; oil prices remain ~13% lower as the market also grapples with rising OPEC+ supply
- US Treasury Secretary Scott Bessent emphasized that neither country seeks economic decoupling
- A joint statement said both nations would establish a mechanism for ongoing dialogue on trade and economic issues
US and Iran agree to resume nuclear negotiations (Bloomberg)
- The US and Iran will hold another round of talks on Tehran’s nuclear program, with the next meeting expected within a week
- President Trump is committed to preventing Iran from obtaining a nuclear weapon, aiming to replace the 2015 accord he exited in 2018

Natural gas is lower after ending Friday at a multi-week high
- Weather forecast changes over the weekend imply an increase in expected demand over the next two weeks
- Production is mostly unchanged with Lower-48 output around 105.3 Bcf/d
Caution is growing due to weak oil prices (S&P)
- Several midstream developers have hinted about a possible slowdown in the development of gas infrastructure projects in the Permian, as oil prices have slowed and activity has declined
- Midstream company, Kinetik, said the company is “proceeding with caution with the two large infrastructure projects,” but “Even if Permian crude production were to stay flat, we still anticipate over 1 Bcf/d, or low to mid single digits, of gas growth per year.”
- Meanwhile, Energy Transfer said that if there is a slowdown, they could delay the commissioning of a new processing plant in the Midland Basin
- Targa Resources sees a 2-3% increase in Permian gas volumes in a flat crude production growth environment