Data from the American Petroleum Institute revealed Tuesday that US crude oil inventories decreased by 2.19 million barrels in the week ended May 8, following an 8.1-mmbbl draw the previous week and a Bloomberg-compiled survey estimate of a 1.65-mmbbl decline.
The oil market now awaits the US Energy Information Administration's petroleum inventory report, scheduled for release on Wednesday.
Three US liquefied natural gas cargoes are sailing to China, marking the first direct shipments between the countries in more than a year, according to a Reuters analysis on Tuesday, citing LSEG data.LSEG shipping data showed the vessels departed LNG export terminals in Louisiana last week and are scheduled to reach Tianjin between June 15 and June 20.The planned deliveries come as US President Donald Trump prepares to travel to Beijing this week for talks with Chinese President Xi Jinping.Since Trump returned to office in January 2025, no LNG vessel has shipped directly from the US to China because trade tensions pushed buyers to redirect cargoes elsewhere, the analysis said.Chinese importers holding contracts with US LNG producers sold many shipments to other countries over the past year as stronger global prices created profitable resale opportunities.The analysis cited EBW Analytics, which said China has relied more heavily on pipeline gas supplies from Russia and Central Asia rather than increasing purchases of US LNG.Columbia University researcher Erica Downs said lower inventories could encourage China to buy more LNG from the US, although cheaper pipeline imports and domestic gas production remain more attractive options."Beijing likely views the United States as an unreliable trade partner," Downs said.Umm Al Hanaya departed Cheniere Energy's (LNG) Sabine Pass export terminal on May 5, while Al Sailiya and Id'Asah left Venture Global's Plaquemines facility on May 8, the analysis added, citing LSEG data.If the vessels reach China, they would mark the first direct US LNG shipments to arrive since February 2025, when four cargoes reached Chinese ports before President Donald Trump began his second term.The US Department of Energy said two LNG vessels delivered small portions of US cargoes to China in 2025 and 2026 after unloading most of their shipments in Bangladesh.US DOE added 64 LNG vessels delivered cargoes to China from the US in 2024, compared with 52 in 2023, 30 in 2022 and a record 131 shipments in 2021, according to the analysis.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
US natural gas futures pared steeper losses in after-hours trading on Tuesday but still closed lower as traders refocused on oversupply concerns.Both the front-month Henry Hub contract and the continuous contract fell 2.61% to $2.834 per million British thermal units.Tuesday's price drop reversed part of Monday's more than 6% surge that had pushed prices to their highest levels since March. Monday's rally was fueled by forecasts for stronger cooling demand and expectations of tighter balances following the restart of a Texas LNG plant as well as continued support from the conflict in the Middle East. But analysts said the market's attention has shifted back toward ample supply and weakening near-term demand."Geopolitics has kept global energy markets jumpy and helped support gas earlier in the week, but follow-through has been elusive with national demand still choppy and supply holding near seasonal highs," Gelber & Associates said in a market note.It added that with LNG feedgas demand easing due to seasonal maintenance and domestic production remaining resilient, "the path of least resistance has shifted lower again as traders look past headline risk and back toward storage and the shoulder season reset."US natural gas demand fell from about 105 billion cubic feet per day earlier in the week to 98.7 Bcf/d on Tuesday, according to NRG Energy.Both heating and cooling demand may pick up in the near term. NatGasWeather said moderate-to-low demand is expected over the next five to six days as cooler-than-normal systems move across the Midwest and Northeast, bringing temperatures into the 30s and 40s Fahrenheit. While the West and Southwest are expected to see highs in the 90s and above 100 degrees Fahrenheit.Meanwhile, production remained steady. NRG Energy said dry gas output averaged roughly 107.2 Bcf/d over the past week with only modest fluctuations. The US Energy Information Administration on Tuesday raised its 2026 production forecast to 110.61 Bcf/d from 109.60 Bcf/d estimated in April.LNG feedgas flows averaged around 17 Bcf/d, but export demand is expected to soften in the coming weeks due to maintenance at Cameron LNG and lower flows to Corpus Christi and Freeport. Freeport LNG has also announced unplanned maintenance for May.Traders are also monitoring the gradual ramp-up of Golden Pass LNG and the expected startup of Corpus Christi Stage III Train 6 following regulatory approval.
US lawmakers are considering a temporary federal gas tax freeze as gasoline prices reached $4.50 per gallon this week, Bloomberg reported Tuesday.House Speaker Mike Johnson reportedly said lawmakers are reviewing a possible suspension of the federal gasoline tax, calling the proposal an "intriguing idea," according to the report."You have to look at any unintended consequences and evaluate all that, so I'm not yet ready to project it," Johnson told Bloomberg Government.US President Donald Trump backed the idea on Monday and said he wants to pause the 18.4-cent federal gas tax until fuel market conditions improve, the report added, citing CBS News.Drivers could save about 10 cents to 16 cents per gallon under the proposal."It's a conversation that we're willing to have," Senate Majority Leader John Thune said, while warning that suspending the federal gas tax could reduce funding for the Highway Trust Fund.The federal gasoline tax currently helps fund US highway and bridge projects.Republican Senator Josh Hawley introduced legislation that would suspend federal gasoline and diesel taxes for 90 days and allow another 90-day extension.Democratic Senators Richard Blumenthal and Mark Kelly have also supported a temporary fuel tax freeze as higher energy prices continue to strain household budgets, the report said."Trump wants to give real relief to Americans? End the damn war," Senate Democratic Leader Chuck Schumer said, adding that an 18-cent reduction per gallon would not provide meaningful relief for consumers.The US House of Representatives didn't immediately respond to' request for comment.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)