First Look: Permian gas prices flip into positive territory as pipeline maintenance eases

Oil heads for a weekly gain, trading near $79.70
- Prices are set to finish the week up more than 80c following a cooler-than-expected CPI report, and lower US inventories
Ukrainian drones hit another Russian refinery (BBG)
- A Black Sea refinery with a capacity of 240 MBbl/d has caught fire and been taken offline due to an attack by Ukrainian drones
- Ukraine has continued to attack Russian oil infrastructure this year, reducing the amount of petroleum products Russia can export
- The same refinery was offline for three months following a drone attack in January
- Reduced refinery throughput could lead to higher oil exports from Russia as their processing capacity decreases
China ramps up oil restocking (BBG)
- China has added more than 30 MMBbls of oil to its inventories over the past month as the country continues to restock
- Kpler said, “We expect Chinese stockpiling to be firing on all cylinders in May.”
- Vortexa said, “This round of restocking will probably continue until June before refineries ramp up following maintenance”

Natural gas prices head for weekly gain amid continued low production
- June ’24 Henry Hub is up 5c this morning to trade around $2.545/MMBtu
- The Summer ’24 strip is up 3.5c to $2.719 and Winter ‘24/’25 strip is up 2.2c to $3.533
- Today’s Euro Ensemble indicates colder weather, with gradually rising temperatures over the next 15 days but no extreme temperatures anticipated (Criterion)
  - Furthermore, severe storms in the Houston area last night caused widespread power outages, leaving over 800K people in Southeast Texas without power, but looks like Entergy is supplying power to the coast, and LNG terminals remain unaffected
Permian gas prices flip into positive territory as pipeline maintenance eases (S&P Global)
- Natural gas prices in the Permian Basin turned positive since May 14 as maintenance on the Permian Highway Pipeline neared its end
- Over the past week, Permian gas producers paid end-users up to $6/MMBtu to offload excess supply due to limited transport capacity, with cash prices averaging minus-$2.57/MMBtu from May 7-14
- Ongoing maintenance on El Paso Natural Gas is expected to restrict flows by nearly 375 MMcf/d May 15-19, 430 MMcf/d May 20-24, and 115 MMcf/d May 25-31, keeping West Texas gas prices volatile
- Additionally, over the next several days, Platts projects Texas gas demand to drop by nearly 1 Bcf/d or almost 8% due to mild spring temps however, continued strong production from the Permian could add to supply pressure