Crude edges higher despite reports of a potential US-Iran deal
The WTI prompt-month contract rose $0.57 to $76.34/Bbl Wednesday morning (7:30 AM CT)
Crude futures moved slightly higher despite Axios reporting that the US, Iran and Oman were close to reaching a 60-day interim agreement aimed at restoring shipping through the Strait of Hormuz
Under the proposal, vessels would not be charged tolls or transit fees, with inbound ships using a northern route and outbound traffic traveling through a southern lane
However, Iranian state television said the potential agreement between Iran and Oman regarding vessel traffic through Hormuz would not result in the strait reopening immediately
Yemen’s Houthis claimed to have struck a tanker near Saudi Arabia’s Yanbu port overnight, creating additional risks for Saudi crude exports through the Red Sea
Saudi Arabia has increasingly relied on its Red Sea export route to move barrels that cannot transit through the effectively closed Strait of Hormuz
Japanese shipping company Nippon Yusen KK said its latest earnings forecast assumes disruptions to Red Sea shipping routes will continue through the remainder of its fiscal year ending in March 2027
Gas edges higher as production drops to a two-week low
Natural gas is up 0.3c to $2.685/MMBtu (As of 07:30 AM CDT)
L48 natural gas production slipped 1.3 Bcf/d to 110.1 Bcf/d, the lowest mark over the last two weeks (Criterion)
Dry gas production in August so far is still up roughly 2.7 Bcf/d yoy (S&P)
Temperature changes were minimal from yesterday
Heat is expected to peak in the forecast range around next Tuesday
The 11-15 day range (Aug 15-19) is expected to be a bit cooler than average as monsoonal moisture sweeps across the L48 starting in SoCal (CWG)
Texas Governor Gregg Abott ordered audit of data center projects (S&P)
Abbott has ordered the PUC of Texas and ERCOT to audit all data center applications for grid interconnection
ERCOT has 421 GW of large loads seeking interconnection by 2031
The extended audit process will slow interconnections, delaying potential natural gas demand growth in the state
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