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First Look - Crude rises on Iran nuclear talks uncertainty, US exports slide on soft demand

Crude prices climb amid uncertainty over nuclear negotiations
- Oil rebounded after Iran’s foreign minister cast doubt on the progress of nuclear talks with the US
- WTI prompt-month contract rose $0.31 to $61.93/Bbl as of Friday morning (7:45 AM CT)
- The IEA forecasts a global oversupply in 2025–2026, citing rising output and slowing demand growth
- Westpac’s Robert Rennie sees Brent holding in the $60–$65 range, noting that sanctions relief on Iran may only bring 200–300 MBbl/d of new supply
US crude exports fall sharply, signaling oversupply pressures (Bloomberg)
- Average US oil exports fell 10% to 3.76 MMBbl/d in the four weeks ending May 9, the slowest rate since January (EIA)
- The decline stems from a mix of trade tensions, limited refining capacity, and cheaper Middle Eastern barrels entering the market
- Despite the dip, Energy Aspects maintains a forecast for 800 MBbl/d in global oil demand growth this year, calling the export slump temporary
Egypt turns to fuel oil as gas becomes too expensive (Bloomberg)
- Facing high natural gas prices, Egypt is purchasing large volumes of fuel oil, including a recent tender for nearly 2 MMt to power its grid
- Domestic gas output has plunged, shifting Egypt from a net LNG exporter to an importer; it’s now seeking long-term LNG contracts to reduce spot exposure
  - Current gas production stands at ~4.2 Bcf/d, well below demand of 6.2 Bcf/d, expected to hit 7 Bcf/d during peak summer cooling season

Natural gas is heading for a weekly decline, with prices slightly lower this morning
- The June Henry Hub contract is down about 43c this week with prices moving lower for the last four consecutive days (8:15 AM)
- Weather forecasts continue to look cooler than the ten-year average for the next two weeks, keeping gas demand limited
- Production is still averaging about 105 Bcf/d, with output mostly flat from the start of the year
- Freeport LNG experienced another operational issue yesterday evening, but flows have returned to normal as of this morning
Storage surplus continues to expand
- Yesterday, the EIA reported a +110 Bcf injection into storage for the week ending May 9, bringing the surplus to the five-year average to +57 Bcf
- US gas inventories stood at a sizeable deficit only a few weeks ago, but mild weather has reduced demand, bolstering storage injections
- The surplus is expected to expand further over the next few weeks, based on current weather forecasts