Crude prices retreat after US-Iran agreement signed
The WTI prompt-month contract fell $1.68 to $75.11/Bbl on Thursday morning (7:30 AM CT)
Futures moved lower after President Trump signed a memorandum of understanding with Iran, raising expectations that traffic through the Strait of Hormuz could normalize in the coming weeks
According to Bloomberg, four supertankers carrying roughly 8 MMBbls of crude have either exited or are currently transiting the strait, including the first Saudi-owned vessels to make the passage since the conflict began
Despite the improvement, Goldman Sachs estimates that crude flows through the Strait of Hormuz may recover to only about 70% of pre-conflict levels
The EIA reported an approximately 8.3 MMBbl draw in US crude oil inventories, leaving stocks 2.7 MMBbls below year-ago levels and 51 MMBbls below the five-year average
Inventories at Cushing declined for an eighth consecutive week and now stand near 20 MMBbls, a level some market participants view as approaching minimum operating requirements for the storage hub
Gas inches up as power burn advances
Natural gas is up 1.1c to $3.156/MMBtu (As of 07:30 AM CDT)
Power burn picked up 1.7 Bcf/d back to 42 Bcf/d this morning (Criterion)
Much of the warming in the Midcon that was expected two weeks ago didn’t materialize, however this was offset by above expectation warming in the South Central
Going forward two weeks, the Midcon again (specifically in states like Wisconsin, Michigan, and Illinois) is forecasted to lead temperature gains in the L48 (CWG)
Much of the region is forecasted to average around 62°F today, but forecasted to reach averages of 72°F by the beginning of July
Waha gas prices trade at 4-month highs amid signs of an early GCX expansion startup
The Waha basis prompt contract settled at -$2.7275/MMBtu, up from -$4.3525/MMBtu a week ago
The fixed price has also firmly entered positive territory, settling at $0.4175/MMBtu yesterday
Although never formally announced by Kinder Morgan, the GCX startup has lifted Waha gas prices to their highest level since February
A Kinder Morgan rep said on June 11 that the project was on track to start late Q2 (S&P)
According to the EIA, a capacity expansion on the 2.5 Bcf/d Blackcomb pipeline could also come as soon as the third quarter
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