First Look: Israel tells civilians to evacuate Rafah | Saudi Arabia increases crude prices to Asia
May 06, 2024
Oil prices are trading higher, around $78.75, as Israel prepares Rafah attack
Prices fell nearly $6/Bbl last week to the lowest levels since March amid a relaxation of risk premium and a larger than expected storage build in the US
Israel tells civilians to evacuate Rafah (BBG)
In a possible prelude to an attack on Rafah, the last part of Gaza controlled by Hamas, the Israeli Defense Force has told civilians to leave the area
The move comes after ceasefire talks stalled over the weekend, and a Hamas rocket barrage killed three Israeli soldiers
CIA head William Burns will be traveling to the Middle East in a bid to save negotiations today as the US continues to push for diplomatic solutions
The conflict has led to higher risk premium in oil prices due to the risk of a wider regional conflict, although much of the risk premium has come out of prices in recent weeks
Saudi Arabia increases crude prices to Asia (BBG)
For the third consecutive month, Saudi Arabia has increased the official selling price of its flagship Arab Light crude to Asia
Saudi Aramco increased the price by 90c to a $2.90/Bbl premium to the regional Oman-Dubai benchmark
Saudi Arabia has been attempting to keep oil markets tight by reducing supply along with other members of OPEC, which has been reflected by the higher prices
Natural gas prices trade higher amid improving weather outlook
June ’24 Henry Hub is up 5.2c this morning to trade around $2.194/MMBtu
The Summer ’24 strip is up 5.1c to $2.479 and Winter ‘24/’25 strip is up 3.5c to $3.475
Today's Euro Ensemble indicates mixed weather with warming in the 11-15 day period despite the initial cold, particularly affecting the Northeast, with another mid-week cooling forecasted (Criterion)
Feedgas deliveries to Cameron LNG terminal dropped last Thursday and Friday, indicating the potential start of annual maintenance (S&P Global)
Total US LNG feedgas demand averaged 11.9 Bcf/d in April, decreasing from 13.1 Bcf/d in March amid maintenance and repairs at Freeport’s facilities
Cheniere maintains steady 1Q LNG export levels and production guidance for 2024 (Criterion)
During 1Q24, Cheniere exported 166 LNG cargoes, consistent with the 167 cargoes exported in 1Q23; the company's production was comprised of 608 Tbtu from SPL/CCL and 11 Tbtu from third-party LNG volumes
Cheniere maintains its annual LNG production guidance at 45 Mtpa, with planned maintenance expected to be managed more strategically throughout the year to minimize commercial impacts
Corpus Christi Stage 3 is 55.9% complete, targeting the first LNG from CCL Stage 3 Train 2 by the end of 2024, with full completion of the facility expected between the 1H 2025 and 2H 2026
Despite the DOE non-FTA permitting pause, ongoing customer discussions ensure no impact on CCL Train 8-9 development or SPL Expansion
US LNG exports dwindle in April as price difference with Europe, Med narrows (S&P Global)
US LNG exports in April fell to 6.51 million mt, the lowest since November 2022, due to reduced premiums with European and Mediterranean markets
A partial outage at Freeport LNG, lasting from late January to May for maintenance and debottlenecking, lowered Q1 2024 exports to 24 million mt from 25 million mt in Q4 2023
Platts assessed the Gulf Coast Marker for US FOB cargoes at $8.10/MMBtu on May 1, marking a decrease of $0.26 on the day and $0.29 over the week
In comparison, the LNG Northwest European marker was at $8.73/MMBtu and the East Med marker at $8.86/MMBtu on the same date, both down $0.32 on the day; NWE carried a $0.63/MMBtu premium and East Med a $0.76/MMBtu premium over the US GCM
Despite the overall decline, US LNG exports to Europe, including Turkey, saw a minor increase in April to 4.4 million mt, up from 4.36 million mt in March
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