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First Look - Oil prices steady as conflict continues; natural gas rises to 10-week high

Oil holds steady as Israel-Iran conflict continues into sixth day
- The WTI prompt-month contract rose $0.36 to $75.20/Bbl as of Wednesday morning (8:35 AM CT)
Asian buyers shift to non-Hormuz crude amid geopolitical risks (Bloomberg)
- Demand is rising for Middle Eastern oil that loads outside the Strait of Hormuz, as well as Malaysian grades, due to concerns over potential disruptions
- ICE Murban futures volume surged to 44,000 lots, nearly triple the 2024 average, and remains elevated
- Murban is trading at a premium of up to $0.67/Bbl over Brent, while Malaysia’s Labuan crude has reached an $8/Bbl premium to Dated Brent, highlighting the premium placed on perceived logistical safety
Iran’s crude exports jump despite conflict (Bloomberg)
- Iran exported an average of 2.33 MMBbl/d since June 13, a 44% increase from the year-to-date average through June 12
  - Most volumes are sourced from Kharg Island, a key export and storage hub.
- There’s been no reported damage to Iranian oil infrastructure, and tanker traffic through the Strait of Hormuz remains normal, per Bloomberg tracking

Natural gas prices rallied for the fourth straight trading day on Wednesday amid forecasts for impressive heat in the Lower 48
- The July contract was only 9c short of hitting $4.00/MMbtu at $3.911 as of 7:53 AM CT Wednesday
- Peak heat nationally is expected Tuesday, June 24^th, which is now day seven in the model runs
  - The heat ridge in the Midwest and East should bring mid-upper 90s to part of the Midwest as well as temps near 100 for East Coast cities (CWG)
- The EU plans to implement a ban on EU imports of Russian gas and LNG by the end of 2027
The European’s proposed ban on Russian gas imports (Reuters)
- Would halt Russian gas imports over time by the end of 2027
- The ban would use legal measures to make sure the plan could not be blocked by EU members Hungary and Slovakia
- According to Reuters, about 19% of Europe’s gas still comes from Russia
  - This is down from 45% before Russia’s invasion of Ukraine

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