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First Look - WTI drops below $60 amid demand concerns and Saudi Price Cuts

April 07, 2025 | Narciso Cano
  • WTI prompt-month contract is down $1.66, trading at $60.33/Bbl (7:50 AM CT), prices briefly fell below $60 earlier Monday before rebounding
    • Over the weekend, Saudi Aramco cut its Arab Light crude price to Asia by $2.30/Bbl—the steepest reduction since 2022—amplifying concerns over oversupply amid weakening demand (Bloomberg)
      • This follows last week’s OPEC+ announcement to add over 400 MBbl/d to the market starting next month
    • The 2026 WTI futures strip was at $59.01/Bbl as of 8:10 AM CT
      • A recent Dallas Fed survey indicated producers need $65/Bbl on average to profitably drill new wells
    • On Friday, Brent futures saw record bearish put option activity, signaling increased downside hedging by traders
    • Russia’s Urals crude dropped to $52.76/Bbl at the Baltic Sea port of Primorsk (Argus Media)

 

 

 

 

 

 

 

 

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  • Natural gas prices were up Monday morning through the Summer ’25 strip but down for the rest of the curve
    • The balance of Summer ’25 (May-Oct) was up 2.4c to $4.23 while Winter ‘25/’26 traded 1.3 lower to $4.682  (8:00 AM CT)
    • The Winter ‘25/’26 at $4.68 is the lowest value for the strip since the end of February
      • The high watermark was $5.17 back on March 10
    • Gas prices for Waha basis are higher today:
      • May ‘25-Oct ’26 was trading at -$1.90 this morning – up 30c from Friday’s -$2.20 settlement
      • The Summer ’26 strip was also higher at -$2.00 from a -$2.25 settle on Friday
    • AEGIS notes: Kinder’s Gulf Coast Express (GCX) will enter maintenance on April 8-11 and April 12-15 (Kinder Morgan, Criterion)
  • Trump tariffs cloud future of US LNG exports amid rising trade tensions (S&P Global)
    • New US tariffs are adding uncertainty to LNG investments and long-term contracts
    • Europe is unlikely to impose tariffs on US LNG because it depends heavily on those supplies
    • China has already added a 15% tariff on US LNG, and other countries may consider similar moves
    • Higher import costs from tariffs could delay LNG project development and financing
    • Conflicting US trade policies are making global buyers cautious about signing long-term LNG deals

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