Crude eases as confidence returns to Hormuz shipping
The WTI prompt-month contract fell $0.62 to $73.24/Bbl on Tuesday morning (7:30 AM CT)
As 60-day interim peace talks continue, a growing number of vessels are openly declaring plans to transit the Strait of Hormuz, signaling improving confidence among shipowners and traders that shipments can move safely through the key waterway
The shift “reflects a degree of strengthening confidence among shipowners, as Iran is expected to refrain from targeting vessels,” said Muyu Xu, senior crude oil analyst at Kpler
According to Bloomberg, more than 30 MMBbls of Iranian crude have sailed toward Asia over the past week as the US moves forward with sanctions waivers covering those cargoes
Meanwhile, Chinese buyers remain largely sidelined in the spot crude market, reducing imports by an estimated 3-4 MMBbl/d, though balances could tighten if purchasing activity returns
However, 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
“Prices could be hit by both a rise in supplies from the Gulf as traffic through the Strait of Hormuz pick up, and demand worrries,” said Jens Naervig Pedersen of Danske Bank
Natural gas trades lower as weather models cool slightly
Today’s Euro Ensemble model showed a slightly cooler Lower-48 over the two-week period, primarily driven by a cooler Northeast and despite a warmer Midwest
LNG feedgas demand has recovered in recent weeks, but maintenance work is planned pipes serving Sabine Pass, Corpus Christi, and Golden Pass for several periods in late June and July
Southeast gas pipeline project could start earlier than expected (NGI)
Boardwalk Pipeline’s Kosci Junction project could start flowing gas as soon as April 2028, several months ahead of prior targets
The 1.16 Bcf/d project will connect supply from the Midcontinent and Northeast with demand centers in the Southeastern US
Utilities in the Southeast are continuing to add more gas-fired power generation, increasing competition for gas with LNG terminals
Southeast gas basis prices have trended higher in recent months, typically trading at a premium to Henry Hub
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