First Look - Russia cuts oil exports to address excess output

• Oil is trading down by more than $1 to $72.90, extending losses from yesterday (As of 8:18 AM)
  • Yesterday, WTI finished lower by about $2.75 following the OPEC+ meeting over the weekend
  • The Department of Energy announced plans to purchase an additional 3 MMBbls for the SPR for November delivery
• Russia cuts oil exports to address excess output (BBG)
  • Russia’s four-week average crude export fell for a fourth consecutive week, falling to the lowest level since mid-February
  • Russia has pledged to lower exports to adjust for higher production and meet its pledged OPEC+ quota, which it blamed on “technicalities”
  • Russia previously had an export quota but recently switched to a production quota in line with other OPEC+ members
• Transmountain expects 22 tankers in June following expansion startup (BBG)
  • Transmountain said their system will operate at 75% capacity in June, shipping 668 MBbl/d from Alberta to Vancouver
  • The company added that “startup operations of the expanded line are going exceptionally well and as anticipated”
  • The expansion has more than doubled the capacity of the pipeline and will significantly increase pipeline egress capacity for Canadian heavy crude

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Interest Rate Charts and Tables

• Natural gas futures trade lower after yesterday’s near 17c rally, with low production continuing to support the market
  • July ’24 Henry Hub is down 3.6c this morning to trade around $2.720/MMBtu (As of 8:18 AM)
  • The Summer ’24 strip is down 2.6c to $2.792 and Winter ‘24/’25 strip is down 1.3c to $3.527
  • Today’s Euro Ensemble indicates slightly cooler temperatures for the next 1-5 days in the Midwest, South Central, and West, with below-normal temps through mid-June (Criterion)
• Widening natural gas basis east of Henry Hub signals need for brownfield expansion (S&P Global)
  • Natural gas cash prices in eastern Louisiana held a 77c/MMBtu premium to Henry Hub May 21-31, according to Platts. The basis had been close to zero for most of April and the first half of May
  • Increased cooling demand and extended maintenance at Transco Station 60 have contributed to the price rise in eastern Louisiana
  • EnLink Midstream plans a 210 MMcf/d brownfield expansion on its Bridgeline system to address market demand, starting Q4 2025
  • Rising industrial and LNG demand in the region, including the 20 mmty Plaquemines facility, continues to drive competition for gas