First Look - Speculators amplify crude selloff | OPEC supply move spooks physical traders

• Oil is trading slightly higher, at $73.52, reversing some of yesterday's losses (as of 8:24 AM)
  • The EIA will release its weekly crude inventory report today, with the API forecasting a build of 4.1 MMBbls
• Speculators amplify crude selloff (BBG)
  • Oil traders using trend-following algorithms may have compounded a selloff in oil this week following the OPEC meeting on Sunday
  • Brent falling below $80/Bbl prompted many technical traders to sell futures, with the managed money group of participants flipping to a net short position in ICE Brent, according to data from Bridgeton Research Group
  • An energy specialist at TP ICAP Group said, “CTAs are just hammering away the market with massive selling seen yesterday”
• OPEC supply move spooks physical traders (BBG)
  • Physical oil traders have said that OPEC's view that the market will tighten from higher demand has yet to materialize
  • Diesel refining margins in Asia remain weak, posing a bearish risk for crude prices if refiners cut throughput rates
  • Several cargoes of North Sea crude are still flowing off the coast of the UK due to lackluster buying in Asia and Europe

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Interest Rate Charts and Tables

• Natural gas futures trade higher after yesterday’s pullback, buoyed by summer heat and strong LNG demand, though the storage surplus continues to weigh on prices
  • July ’24 Henry Hub is up 3.6c this morning to trade around $2.720/MMBtu (As of 7:46 AM)
  • The Summer ’24 strip is up 6.2c to $2.731 and Winter ‘24/’25 strip is up 4.3c to $3.500
  • Today’s Euro Ensemble for the Lower 48 shifted warmer by +7 degrees, with notable gains of +29 and +16 degrees in the Midwest and Northeast, respectively, especially in the 11-15 day period (Criterion)
• Delfin LNG permit expiration paused as federal agencies review project (NGI)
  • DOE temporarily maintains Delfin LNG’s authorization for global natural gas exports, pausing expiration while reviewing extension request
  • Delfin requested an extension to place the first phase of the project in service by June 1, 2029, citing impacts from the Covid-19 pandemic and global conflicts
  • The project aims to produce over 13 MMty from four FLNG units, pending final licensing from MARAD
  • Delfin secured potential agreements to supply 5.6 MMty, contingent on receiving MARAD’s license and further environmental review
• ANR ends Eunice southbound force majeure; capacity lifted to 850 MMcf/d (Criterion)
  • ANR is lifting the capacity restrictions that have impacted Eunice Southbound since June 2, effective immediately
  • Completion of planned maintenance allows operational capacity to rise to 850 MMcf/d for June 5-6
  • Previous force majeure restrictions limited capacity to 350 MMcf/d through June 11