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First Look - Oil slips as Ukraine talks resume; gas slumps to May low on cooler weather

Oil prices ease as Ukraine ceasefire talks emerge
- President Trump announced a scheduled call with Russian President Vladimir Putin on Monday to discuss ending the war in Ukraine
- WTI prompt-month contract fell $0.25 to $62.24/Bbl Monday morning (7:45 AM CT)
- President Masoud Pezeshkian reiterated Iran’s intention to pursue civilian nuclear energy while emphasizing that the country has no plans to develop nuclear weapons
Moody’s downgrades US credit rating, rattling markets (Bloomberg)
- Moody’s Ratings cut the US government’s credit rating to Aa1 from Aaa, citing fiscal concerns and rising debt levels
- Long-dated Treasuries declined, with the 30-year yield climbing to 5.02%, the highest since November 2023
- The downgrade weighed on the dollar, which fell against all G-10 currencies, and pulled US stock futures lower
- Analysts warn the move could deepen market concerns over US sovereign risk and slowing economic growth
Hedge funds raise bullish Brent positions on trade truce optimism (Bloomberg)
- Money managers increased net long positions on Brent by 53,586 lots to 151,144, the highest since early April, per ICE Futures Europe data
- Short positions fell to a three-week low following renewed optimism over a China–US trade truce

Natural gas falls to month-to-date low
- The June Henry Hub contract is down 15c to $3.18, the lowest level since April, while the Winter ‘25/’26 strip is down 13c to $4.43/MMbtu and Summer ’26 is down 7c to $4.05/MMbtu (8:15 AM)
- Weather forecasts shifted cooler over the weekend, implying a drop in expected demand over the next two weeks
  - Lower-48 population weighted average temperatures are forecast to average about 65.7ºF this week and next week, before rising to 70ºF the first week of June
- While Lower-48 gas production reached 106.6 Bcf/d on Friday, receipts have come back down to 105.9 Bcf/d, according to data from S&P
Another above-average hurricane season forecasted (Bloomberg)
- 17 named storms are anticipated for the 2025 Atlantic hurricane season, compared to the average of 14 storms
- A neutral El Nino/La Nina pattern should reduce the amount of wind shear, allowing storms to remain strong
- Hurricanes, while once a bullish factor for natural gas, are now more of a bearish risk as offshore gas supply is now only about 2% of total US production and demand along the Gulf Coast has grown due to LNG and power