First Look: Asian crude imports hit a 12-month high, driven by India

Oil prices are lower, around$78.95, ahead of EIA inventory report
- The API is forecasting a draw of 6.5 MMBbls last week from US inventories, ahead of the official release by the EIA
Asian crude imports hit a 12-month high, driven by India (Reuters)
- Asia, the top oil-importing region, is expected to have received 27.81 MMBbl/d in May, up from 26.89 MMBbl/d in April
- While Indian imports rose, demand from China has continued to weaken, falling by 210 Mbbl/d
- About 38% of India’s imports were sourced from Russia, with Iraq being the second-largest supplier
Russia says US sanctions are unacceptable (Reuters)
- Russia’s Foreign Ministry said on Thursday that US plans to curb Russia’s shadow fleet of tankers further is unacceptable
- The US and other Western governments are considering additional sanctions that could further restrict Russia’s ability to ship crude
- Russia’s statement said, "We decisively condemn introduction of price caps, restrictions on oil sales, attempts to set up buyers' cartels and demands to lower the prices,"

Natural gas prices trade lower ahead of the storage report
- July ’24 Henry Hub is down 4.9c this morning to trade around $2.617/MMBtu
- The Summer ’24 strip is up 1.1c to $2.670 and Winter ‘24/’25 strip is down 3.0c to $3.444
- Today’s Euro Ensemble indicates temperatures in the Lower 48 to be generally stable with minor regional shifts, showing the South-Central warming and the Rockies/West cooling, and forecasts peak heat in the middle of next week (Criterion)
Texas grid operator sees plentiful supply 2025-2029, but surging load could eliminate surplus (S&P Global)
- ERCOT report on May 24 projected 2025 reserve margin at 46%, meaning expected resources would exceed expected peak loads by 46%, tripling the 13.75% target, with 2026-2029 margins between 55% and 64%
- From 2026 to 2029, reserve margins with new contracted loads could drop from 38.2% to a critical low of 24.2%, with the potential to go negative by 2029 due to increasing load demands. according to ERCOT’s May Capacity, Demand, and Reserves Report
- New Texas legislation requiring the inclusion of forecasted loads without signed interconnection agreements could further reduce reserve margins, potentially leading to deficits starting in 2028
- Utility-scale solar is expected to significantly contribute to peak demand coverage, with additional solar capacity planned; however, changes in peak demand timing could affect future calculations