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First Look - Oil falls as US-Iran nuclear deal nears; IEA sees demand slowdown

Oil slides on Iran deal momentum
- Oil prices declined for a second straight session after President Trump indicated progress toward a US-Iran nuclear agreement
- WTI prompt-month dropped $1.87 to $61.28/Bbl early Thursday (7:54 AM CT)
- A potential deal could unleash 300–400 MBbl/d of Iranian supply, about 0.3–0.4% of global demand, into a market already facing rising output from OPEC+
- The prospect of increased supply is fueling concerns of a potential surplus later this year
IEA: Global demand growth to lose steam in 2025
- The IEA forecasts global oil demand growth will slow to 650 MBbl/d for the remainder of 2025 due to economic headwinds
- Contributing factors include softening global economic activity, trade uncertainty, and weaker-than-expected demand in key emerging markets like China and India
- Despite a pullback among US shale producers, global supply growth is still expected to outpace demand, potentially adding up to 2 MMBbl/d to inventories in Q1 2026
- The agency cut its 2026 US shale growth outlook by 190 MBbl/d, its second downward revision in as many months

Natural gas prices continue to move lower, ahead of the EIA storage report
- The June Henry Hub contract is down another 5c this morning, with prices down about 36c over the past four days (8:10 AM)
- The EIA will release its weekly natural gas storage report today, with a median expectation of a +110 Bcf build, according to the Bloomberg survey
  - This would be the third consecutive 100+ Bcf injection of the year
- Weather forecasts shifted cooler again, with the Lower-48 forecast showing temperatures well below the ten-year average for most of the next two weeks
Tallgrass to build Permian to Rockies pipeline (PGJ)
- Tallgrass announced plans for a new pipeline to transport natural gas from the Permian Basin to the Rockies, with a target operational date in 2028 and a capacity of 2.4 Bcf/d
- The pipeline will deliver gas to the Rockies Express Pipeline and other delivery points
- While the project is designed to be capable of shipping up to 2.4 Bcf/d, the ultimate capacity will depend on the level of interest from shippers