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First Look - Oil pulls back after US-China tariff reprieve surge

Crude pulls back modestly
- WTI prompt-month futures slipped $0.69 to $62.98/Bbl Wednesday morning (7:45 AM CT)
- President Trump reiterated threats to Iran’s oil exports amid stalled nuclear negotiations
- The API reported a 4.29 MBbl inventory build, the largest weekly increase since March if confirmed by the EIA later today
OPEC+ eases into supply hike (Bloomberg)
- OPEC+ added just 25 MBbl/d in April, far short of the scheduled 138 MBbl/d, per the latest OPEC report
- Saudi Arabia delivered its expected share, while production fell in countries like Iraq and Kazakhstan as they implement compensation cuts
  - Kazakhstan’s CPC Blend exports are projected to rise to 1.7 MMBbl/d in June, near record highs
- Riyadh remains focused on quota compliance and reportedly pushed to triple the group's output hikes in May and June due to frustration with persistent overproduction
- Iraq averaged 3.964 MMBbl/d in April, trimming output to offset prior violations
- Kazakhstan cut by 41 MBbl/d, but still overproduced by roughly 400 MBbl/d, well above its ceiling
Trump seen favoring lower oil prices
- Goldman Sachs analysts say President Trump’s preferred WTI range is $40–$50/Bbl, based on social media sentiment tracking
- During Trump’s recent Middle East visit, Saudi Aramco CEO Amin Nasser stated the company is well-positioned to weather lower prices

Natural gas is lower by more than 10c, extending losses from the past two days
- Weather forecasts shifted cooler, with temperatures in the 11-15 day period now below the ten-year average, which could depress demand for power generation
Plaquemines LNG could reach peak capacity by August (Bloomberg)
- According to Venture Global’s recent earnings call and analysis by BloombergNEF, the Plaquemines LNG export plant could reach its full capacity of 3.8 Bcf/d in August
- This is much quicker than prior estimates, which were also accelerated as the facility began taking gas quicker than anticipated
Pipeline constraints weighing on Permian gas prices (Bloomberg)
- Cash prices at the Waha hub in West Texas have traded down to $1/MMbtu from $2/MMbtu last week, as maintenance has curbed pipeline capacity in the region
- Maintenance in the region often has a negative impact on gas prices, with cash prices sometimes trading below zero
- Work on Kinder Morgan’s Permian Highway Pipeline is reducing capacity by 0.5 Bcf/d through May 26