Oil is trading higher, at $85, the highest level since October
The market has continued to rally amid the backdrop of OPEC+ supply cuts, geopolitical risk, and strong demand
Russian crude heading to India despite sanctions (BBG)
Three tankers carrying Sokol crude are anchored near Indian ports, indicating trade of the sanctioned crude may be increasing
India has been one of the largest buyers of Russian crude following the invasion of Ukraine but has had issues with importing Russian oil after recent sanctions enforcement
All Sokol cargoes loaded in March and most shipped in February were delivered to China, another large buyer of sanctioned crude
Mexico to halt some crude exports (BBG)
PEMEX plans to halt some exports over the next few months, which could further tighten global markets
The state-owned petroleum company canceled contracts to supply about 600 MBbl/d of Maya crude to refiners in the US, Europe, and Asia
This could impact prices of heavy-sour crude grades such as WCS and Mars, which are of a similar grade to Maya
PEMEX will instead be diverting the crude to domestic refineries in an effort to produce more petroleum products
Natural gas prices trade lower with near-term demand boost from late-season cold expected to be short-lived
May ’24 Henry Hub is down 4.9c this morning to trade around $1.788/MMBtu
The Summer ’24 strip is down 4.1c to $2.284 and Winter ‘24/’25 strip is down 3c to $3.391
Today's Euro Ensemble saw a cooler shift east of the Rockies and warmer in the Rockies/West, with a significant temperature drop in the 11-15 day forecast, aligning with the 10-year average
Natural gas production in the Lower 48 hovers around 99.5 Bcf/d (Criterion)
Mexico natural gas imports seen reaching new highs as price weakness persists (NGI)
Mexico's natural gas imports from the U.S. are averaging 6.09 Bcf/d year-to-date, marking an increase of 0.552 Bcf/d from 2023, according to Wood Mackenzie data
The summer peak season is expected to reach monthly average volumes at or above 7 Bcf/d, driven primarily by power generation needs, said Woodmac’s Ricardo Falcon
West Texas's contribution to Mexico's natural gas imports has tripled since 2017, thanks to discounted Permian gas and the development of new pipeline infrastructure
Furthermore, Mexico's state power company, CFE, cites low gas prices as a contributing factor to its best full-year profit in a decade and is seeking to develop underground gas storage in South Texas
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