Brent crude settled near $66.08/bbl, holding within a modestly higher range despite ongoing weakness in global benchmarks. Henry Hub natural gas eased further, with spot prices at $2.92/MMBtu and September futures down to $2.828/MMBtu. The forward 12-month strip also softened, though forecasts point to higher prices into winter 2025–26, raising the risk of margin compression later in the year. Stable energy prices for now are providing moderate feedstock relief for petrochemical producers.
Rig counts remained unchanged at 539, but activity in Texas and the Permian Basin slipped to their lowest levels since September 2021, hinting at underinvestment that could constrain future supply. For CJ Chemical, short-term conditions suggest stable to reduced feedstock costs, particularly for gas-based operations, while medium-term risks lie in a potential winter gas price spike. Long-term planning should account for possible tightening supply from declining regional drilling activity, emphasizing hedging strategies and supply diversification.
Unlock Full Access to This Article