Written Commentary
Ag Market View for May 20.25
May 20, 2025
NATURAL GAS
June Natural Gas is lower this morning and back in the vicinity of last week’s four month low. The 6-10 and 8-14 day forecasts have turned a bit cooler, but it is getting a bit late in the season for that to have much effect on heating demand. The 6-10-day has below normal temps in from the eastern Midwest/Great Lakes and Appalachia to the East Coast, which has potential to boost demand a bit. However cooler than normal temps in the southwest could limit cooling demand. The Baker Hughes rig count showed US natural gas rigs in operation were up 1 rig to 99 last week. A senior S. Korean government official has ruled out the possibility that they would agree to a trade package with Washington by the time the country holds its presidential election on June 3, possibly not until July at the earliest. The US and South Korea agreed to craft an agreement aimed at removing new US tariffs before the pause in reciprocal tariffs is lifted on July 8. Among the items being discussed was a plan to send a working-level delegation to Alaska to review the business feasibility of a $44 billion liquefied natural gas project. European gas prices are lower today on mild weather and softer demand expected this week.
CRUDE OIL
July Crude Oil traded to its highest level since last Wednesday overnight but came up well short of that day’s two and a half week high. There was a report from Reuters that Saudi Arabia may increase its crude prices to Asia in June after cutting it price to its lowest level in three years in May. The Trump administration has signaled it was open to de-escalating the trade war with China, but Beijing has repeatedly denied that any trade talks were occurring. Some members of OPEC+ are expected to suggest that the group accelerate oil output hikes for June when the meet on May 5. The agreed to increased output by 411,000 barrels per day in May when they met earlier this month. That was three times more than the group originally planned there were hints at a similar increase. The Iran/ US nuclear talks are scheduled to continue in Oman this week, and they appear to be getting down to a more detailed level. The Baker Hughes rig count showed US oil rigs in operation were up 2 rigs to 483 last week. This was down from 506 rigs a year ago and above the five-year average of 474.
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