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Europe's Diesel, Jet Fuel Imports Shrink Amid Iran Conflict, Bloomberg Analysis Says

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European imports of diesel and jet fuel remained stagnant in May, tightening regional energy supplies as the Middle East conflict continues to disrupt global shipping routes, a Bloomberg analysis showed on Monday.

Shipments into the European Union and the UK totaled 1.16 million barrels per day last month, a decline of over one-third compared to the same period a year ago.

Though the figure represents a marginal increase from April's arrivals of 1.09 million b/d, the lowest level recorded since at least 2015, it underscores a persistent supply deficit.

Europe relies heavily on imports to meet domestic demand for diesel and jet fuel, with a significant portion traditionally sourced from the Middle East.

However, ongoing instability near the Strait of Hormuz, the critical chokepoint connecting Persian Gulf energy infrastructure to global markets, has stifled supply flows, contributing to upward pressure on prices.

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US Natural Gas Prices Flat Over the Week Amid Tighter Storage, Drop in LNG Feedgas Flows

US natural gas markets were mixed over the week amid a confluence of factors, including a smaller-than-expected storage injection, a dip in LNG feedgas flows, and warmer weather across much of the country.In the futures market, the Nymex front-month contract rose to $3.22 per million British thermal units on Friday, up from $3.095/MMBtu on May 29.Natural gas spot prices dropped by $0.20/MMBtu to $2.95/MMBtu during the week ended June 3, from $3.15/MMBtu the prior week, according to the US Energy Information Administration's Weekly Gas Storage Supplement, released on Thursday.This comes despite elevated temperatures across the central US, leading to a 1 billion cubic feet per day, or 3% increase in gas-driven power consumption. Yet, the overall US natural gas consumption fell by 1 Bcf/d, according to LSEG data.Natural gas supplies, however, remained flat over this period, with a 0.3 Bcf/d increase in imports from Canada, largely offset by a 0.2 Bcf/d decline in dry domestic natural gas output.After posting a recovery last week, LNG feedgas flows dipped below 16 Bcf/d earlier this week, a multi-month low, as spring maintenance across several leading facilities continued to weigh on flows, adding to the market's bearish sentiment.Prices were mixed across regional hubs, with the Houston Ship Channel reporting a $0.12/MMBtu increase from the prior week, as daily temperatures soared during the week, while the Waha Hub in West Texas saw a $0.43/MMBtu decline during the same period.The decline was primarily attributed to pipeline maintenance activities, which constrained gas takeaway capacity at the Permian Basin.The net injection into storage for the week ended May 29 was 95 Bcf, up from 92 Bcf the prior week, bringing total gas inventories to 2,578 Bcf, according to EIA data.This was below consensus estimates at 99 Bcf, according to data compiled by Investing.com, making it a bullish storage build.During the same period last year, the EIA reported a net injection of 119 Bcf, while the five-year average for this period was 101 Bcf.All regions reported a net injection of working gas into storage for the week ended May 29, with the Midwest region leading the way at 34 Bcf, followed by the East and South Central regions at 33 and 16 Bcf, respectively.At 2,578 Bcf, US working gas inventories were 3 Bcf, or 1% below the corresponding period a year ago, while still posting a 138 Bcf, or 6% surplus compared to the five-year average for this period.According to Gary Cunningham of Tradition Energy, this lower-than-expected storage build "pushed near-term gas to new highs," and while he expects some profit-taking, the bullish weather forecasts should support prices as "power sector demands and the low injection put us behind pace to match last year's end-of-season storage."Weather forecasts have continued to point to above-normal temperatures across the country, except for a tiny sliver of Alaska, from June 12 to June 18, according to the National Weather Service. This is expected to keep gas power burn elevated over the coming weeks.A total of 29 liquefied natural gas-carrying vessels left US ports during the week, down from 32 vessels the previous week, with a total capacity of 111 Bcf, down by 10 Bcf from the prior week.In international markets, European TTF gas prices averaged $16.27/MMBtu for the week ended June 3, $0.08/MMBtu lower than the previous week. Meanwhile, the Japan-Korea Marker averaged $18.55/MMBtu, about $0.05/MMBtu lower than the prior week.

Commodities

US Natural Gas Update: Futures Fall as Ample Supplies Offset Weather Support

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Commodities

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