Oil & Gas Prices - March 6

[dan_s]

Trading Economics:

WTI Oil Price
WTI crude oil futures surged over 14% to above $92 per barrel on Friday, the highest since August 2022, as intensifying tensions in the Middle East are disrupting global energy trade.
> On Friday, President Donald Trump urged Iran to accept unconditional surrender, amplifying fears that a drawn-out conflict could significantly impact worldwide oil supply.
> Earlier in the day, Qatar’s Energy Minister Saad al-Kaabi told the Financial Times that Gulf exporters would halt production within days if tankers are unable to pass through the Strait of Hormuz.
> The strait is a crucial route that normally handles about 20 million barrels of oil and petroleum products per day.
> The US signaled possible actions to ease pressure, including the potential release of oil from strategic reserves, while also temporarily allowing India to purchase some Russian crude already at sea.
> Meanwhile, Saudi Arabia raised oil prices for Asian buyers and redirected shipments through Red Sea ports to bypass Hormuz.

Bottomline: Oil and LNG tankers are not going to enter a war zone until they know it is secure. Since no one really knows who is in charge of the Iranian military this may take a lot more time to resolve. The insurance issues will not be resolved just because Trump hopes they will. MY TAKE is that even when the bombing stops, which won't be for at least two weeks, there will continue to be a large geopolitical premium in the oil price until stability returns to Iran. That could take years. Decide for yourself if Iran will accept unconditional surrender.

Henry Hub Natural Gas Price
US natural gas futures (APR26) climbed above $3.15 per MMBtu on Friday, putting the market roughly 11% higher for the week amid concerns that the Middle East conflict could cause prolonged disruptions to vital gas supplies.
> Uncertainty over the timeline for restoring full operations at QatarEnergy’s Ras Laffan plant, the world’s largest LNG export hub, has heightened fears of a potential supply shortfall, particularly with the Strait of Hormuz also closed.
> Additional support for prices has come from a bigger-than-expected storage withdrawal, alongside warmer weather forecasts pointing to higher-than-expected demand this week.
> Meanwhile, the Trump administration said it is considering several measures to combat rising energy prices due to the ongoing conflict in the Middle East.
The entire NYMEX strip for HH gas is up today. NOV26, which will be the front contract in October is trading over $4.05/MMBtu at the time of this post. JAN27 is trading at $5.13/MMBtu.
Natural gas prices are currently at $19.40/MMBtu in Asia and $16.65/MMBtu in Europe.