Written Commentary
Ag Market View for May 20.25
May 20, 2025
US LNG Exports Tie March Record with Plaquemines Ramp-Up
NATURAL GAS
July Natural Gas extended yesterday’s rally overnight to its highest level since April 14. Yesterday’s weekly EIA Gas Storage Report came in right at average expectations, and the market rallied off the news, as it apparently feared an even higher number. Storage was +107 bcf from the previous week versus +107 expected (range +93 to +120). The five-year average change for this week is +55. Storage was down -17.8% from a year ago and -0.2% below the five-year average versus -20.2% and -2.8% the previous week. LSEG/Reuters reports that US LNG exports in April equaled their record from March, as capacity continued to increase with the ramp-up of Venture Global’s Plaquemines plant. The weather forecast shows a mix of warmer than normal temperatures in the northern half to two-thirds of the US and cooler than normal in the south, which does not point to any exceptional heating or cooling demand.
CRUDE OIL
June Crude Oil bounced off its lows yesterday and followed through with additional gains overnight. China’s Commerce Ministry said today that that Beijing was evaluating a proposal from Washington to hold talks regarding the tariffs, which offers a glimmer of hope that some agreement could be reached and therefore improve oil demand prospects. The US jobs report this morning came in better than expected, which counters some of the biggest fears about the economic effects of the tariffs, but also reduces pressure on the Fed to cut rates. President Trump’s comments that all purchases of Iranian oil or petrochemicals products must stop and that any country or person buying any from the country would be immediately subject to secondary sanctions was also supportive, as did the cancellation of a fourth round of talks between the United States and Iran on their nuclear program. News that Venezuela’s oil exports fell almost 20% in April, the lowest level in nine months, was also supportive. OPEC+ meets next Monday to discuss June quotas, and there has been talk that they will institute another sharp increase following a 411,000 bpd increase for May. Saudi Arabia is reportedly frustrated that Kazakhstan and Iraq have been exceeding their quotas.
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