Crude prices ease as markets assess progress in US-Iran negotiations
The WTI prompt-month contract fell $1.11 to $74.74/Bbl on Monday morning (7:45 AM CT)
Iranian Foreign Minister Abbas Araghchi said mediation efforts led by Pakistan and Qatar have resulted in meaningful progress toward ending the conflict in Lebanon, while Iran has started to realize economic benefits from last week’s memorandum of understanding
Iran is increasing crude exports, with Bloomberg reporting that roughly 6 MMBbls of Iranian oil are bound for Singapore, a key trading hub where cargoes are often reloaded for delivery into China
Diplomatic discussions are expected to continue this week, with any agreement to end the fighting in Lebanon seen as an important step toward advancing broader US-Iran negotiations
Analysts caution that Chinese oil demand may not fully recover following disruptions caused by the Iran conflict
Rystad Energy estimates that between 200 MBbl/d and 600 MBbl/d of transportation fuel demand lost in China during the conflict could remain absent through the end of the year, while Energy Aspects projects a more permanent reduction of roughly 300 MBbl/d
The Cal 2027 strip was trading at $68.92/Bbl (7:45 AM CT)
Natural gas trades higher as weather forecasts warm
The July Henry Hub contract is higher this morning, as prices continue to trade in a range between $3.00/MMBtu and $3.40/MMBtu
Lower-48 population-weighted temperatures are forecast to rise above the 10-year average around the first week of July, after being below average for much of June
Dry gas production continues to average about 109.5 Bcf/d, according to data from S&P
Southeast Supply Header applies for pipe extension (S&P)
Southeast Supply Header has filed an application with FERC to expand its pipeline system to supply new gas power plants
The extension will have a capacity of 110 MMcf/d and should begin service by early 2029
Power demand is expected to continue to grow in the Southeast US, and compete with LNG exports for gas supply
Get market insights delivered to your Inbox every day!
