Crude prices rally as uncertainty persists around US-Iran negotiations
The WTI prompt-month contract rose $2.51 to $89.87/Bbl on Monday morning (7:30 AM CT)
Washington and Tehran continue to exchange proposals and revisions to a draft agreement aimed at extending the ceasefire and reopening the Strait of Hormuz, though the status of negotiations remains unclear
Iran has indicated that any broader agreement will likely depend on progress toward a ceasefire in Lebanon, where Israel has launched its largest military operation in the country in more than two decades
Crude prices are likely to remain sensitive to headlines as the market continues to balance optimism surrounding a potential deal against the risk of renewed escalation
According to Goldman Sachs, April oil sales data from China and Western Europe suggest roughly 2 MMBbl/d of downside risk to the bank's global oil demand estimates for the month
When combined with ongoing Middle East supply disruptions, the bank estimates this could create approximately $10/Bbl of downside risk to its 4Q26 Brent price forecast of $90/Bbl
Natural gas falls as the forecasted warming stalls
Natural gas is down -6.5c to $3.225/MMBtu (As of 07:30 AM CDT)
Forecasted temperatures were gaining steadily into mid-June late last week, however over the weekend there was minimal overall change to the forecasted L48 average temperatures
Temperatures are hovering around the 10-year normal throughout the forecast period, and look to stall around 75°F in the second week of June
The CDD increase stalled in mid-June as well around 10/d (Criterion)
The warming stall was partially offset by a production slip of just over 1 Bcf/d this morning, however this is likely due to first of month nominations which will become clear in the late cycle
L48 feedgas demand slipped to 17.9 Bcf/d despite Freeport making a comeback (Criterion)
Sabine Pass noms came in lower as outages in feeding pipelines began
Permian forward prices rise as market differentiates between near-term infrastructure constraints and longer-term expectations (NGI)
The Waha forward curve goes non-negative in October, with December currently trading close to $3/MMbtu
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