Crude rebounds as Middle East conflict intensifies
The WTI prompt-month contract rose $3.59 to $91.72/bbl on Tuesday morning (7:30 AM CT)
Prices dropped sharply on Monday after President Trump postponed a potential strike on Iran’s energy infrastructure by five days, citing possible diplomatic engagement
Iranian officials rejected claims of negotiations, while Israeli strikes across the region continued
The Wall Street Journal reports Saudi Arabia and the UAE are preparing for potential involvement, raising the risk of broader regional escalation
Ongoing conflict is disrupting flows through the Strait of Hormuz, forcing Gulf producers to shut in several million barrels per day
Bloomberg reports that Iran has begun imposing transit charges on select commercial vessels moving through the Strait
Goldman Sachs analyst Dean Struyven noted that prolonged disruption could extend current tightness beyond the Middle East and Asia into global markets
The bank now forecasts WTI to average $79/bbl in 2026, up from a previous estimate of $72
Natural gas prompt month rebounds as gas production slips
Natural gas is up 3.4c to $2.925/MMBtu (As of 07:30 AM CT)
Despite relatively weak prompt price, the forward-looking seasonal strips have been gaining over the last month
Winter 26/27 is around $4.40/MMBtu, Summer 27 is around $3.50/MMBtu, and Winter 27/28 is around $4.35/MMBtu, all up from a month ago
L48 production slipped 1 Bcf this morning to 109.1 Bcf/d, combined with Canadian imports being slightly down (Criterion)
Output is at a multi-week low
Weather continues to warm into the shoulder season
The Euro Ens weather forecast shifted warmer, with temperatures rising over 8°F
L48 average temperatures are at or above the 10 year average for almost the entire forecast period
Qatar Energy CEO says repairs from recent strikes are expected to take 3-5 years (S&P)
Force Majeure may be declared for up to five years on some long-term LNG contracts
The US is expected to add roughly 9 Bcf/d of feedgas demand by the end of the decade
The US can play a key role in preventing demand destruction in nations relying on LNG deliveries
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