Data from the American Petroleum Institute revealed Tuesday that US crude oil inventories dropped by 6.75 million barrels in the week ended May 29, following a 2.80-million-barrel draw the previous week, and compared with analysts' estimate of a 3.60-mmbbl decline, according to a Bloomberg-compiled survey.
The oil market now awaits the US Energy Information Administration's petroleum inventory report, scheduled for release on Wednesday.
The European Commission is considering a temporary fiscal exemption that would let member states direct about 0.3% of gross domestic product toward energy support measures, Bloomberg reported Monday, citing people familiar with the discussions.To help governments manage rising energy bills, European Union officials are discussing plans to exclude certain energy-related spending from the bloc's fiscal rules, according to the report.The proposal would follow the model of the defense carve-out previously approved by the Commission.Among the strongest advocates of additional fiscal flexibility, Italy has pressed for relief as elevated energy costs add pressure to a country already burdened by high debt levels.The proposal remains under discussion and key details could still change before any announcement, while the European Commission has not yet made a final decision.European Commission 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.)
Natural gas futures remained under pressure in after-hours trading Monday as weather forecasts indicated little additional warming through mid-June, dampening expectations for stronger cooling demand and limiting price support.Both the front-month Henry Hub contract and the continuous contract fell 3.13% to $3.187 per million British thermal units.Updated forecasts pointed to cooler weather in parts of the eastern US during June 6-10, although above-normal temperatures are still expected across the northern two-thirds of the country during June 11-15, according to a note from Aegis Hedging.Forecasts now show temperatures tracking close to the 10-year average through the outlook period, with nationwide averages expected to plateau near 75 degrees Fahrenheit during the second week of June. Cooling degree day expectations have also leveled off at roughly 10 per day by mid-month, Criterion said, according to Aegis.Ample supplies and muted demand expectations largely offset support from overseas geopolitical developments. Iran suspended talks with the US, saying it would not return to negotiations unless Israeli strikes against Lebanon cease. The development helped lift European natural gas prices by 6%.In the US Lower 48, dry gas production was estimated at 107.5 billion cubic feet per day on Monday, down 3.1 Bcf/d from Friday but up 0.3% from a year earlier, Barchart reported, citing BNEF data. Aegis said market participants viewed the decline cautiously, noting it may reflect first-of-the-month pipeline nomination adjustments, with a clearer production picture expected later in the trading cycle.Trading Economics reported that Lower 48 gas production averaged 109.4 Bcf/d in May, slightly below April's 109.8 Bcf/d average.Demand showed some improvement. Lower 48 state gas demand reached 69.7 Bcf/d on Monday, up 2 Bcf/d from Friday and 10% higher than a year ago, according to Barchart.Power-sector consumption also strengthened. Celsius Energy said power burn totaled 23.6 Bcf on Monday, up 4.1 Bcf from Sunday and 3.8 Bcf above year-ago levels. Natural gas accounted for 38% of the US power generation fuel mix, up 1.1 percentage points from a year earlier.Meanwhile, estimated net feedgas flows to US LNG export terminals were 17.8 Bcf/d on Monday, down 0.7 Bcf/d from Friday and 3.3% lower than the previous week. Aegis said nominations into the Sabine Pass export facility declined as pipeline outages affected several systems serving the terminal.US LNG exports remained subdued, according to Vortexa. Weekly LNG loadings totaled 2.3 million metric tons across 32 cargoes, unchanged from the prior week. Planned maintenance at the Freeport and Cameron export terminals has continued to weigh on output, while the new Golden Pass facility has not loaded a cargo in more than three weeks. However, the QatarEnergy-controlled tanker Barzan is expected to arrive this week to load what would be Golden Pass's third cargo, Vortexa said.
Higher crude oil and refining costs pushed TPH Energy's US retail margin indicator down 11 cents per gallon in May, even as gasoline prices continued to climb, TPH Energy said in a Monday note.Pump prices increased 38 cents per gallon from April to $4.48 per gallon, the highest monthly average since July 2022, but higher refining margins and crude costs more than offset the increase, TPH said.Refining margins rose 33 cents per gallon during the month, while crude costs increased 13 cents per gallon as the Iran conflict and seasonal trends lifted fuel input costs, according to the note.The retail margin indicator fell 11 cents per gallon from the first quarter and reached its lowest level since the first quarter of 2021, TPH said.The PADD 4 retail margin indicator increased 11 cents per gallon from the prior quarter as retail fuel prices in the region climbed $1.29 per gallon.The PADD 2 retail margin indicator declined 17 cents per gallon from the prior quarter, while the PADD 1 indicator fell 15 cents per gallon and the PADD 5 indicator decreased 5 cents per gallon, according to the note.Among companies covered by TPH, Par Pacific Holdings (PARR) has the greatest exposure to retail fuel margins through its service station operations in Hawaii and Washington, the report said.The trend could also affect wholesale fuel marketing activities at Phillips 66 (PSX) and HF Sinclair (DINO), according to TPH.