Oil & Gas Prices - July 11

[dan_s]

Opening Prices:
> WTI is up $0.32 to $73.31/bbl, and Brent is up $0.30 to $77.99/bbl.
> Natural gas is up 3.6c to $2.705/MMBtu. As of 08:00 AM CDT\

AEGIS Notes
Oil

Oil trades higher as concerns about a tight market offset economic worries
> August ’23 WTI gained 32c this morning to trade around $73.31/Bbl
> Equities trade higher while the dollar falls to a two-month low
> Markets await Wednesday's U.S. inflation data for potential insight into interest rate direction
> Despite a slow global economy, the IEA expects continued demand from China and developing countries, along with recent supply cuts, to sustain a tight oil market in 2H2023

Russian oil refining surges to highest in 12 weeks (BBG)
> Russian oil refineries raised crude-processing rates in early July to a 12-week high of 5.65 MMBbl/d due to strong international fuel demand and upcoming subsidy cuts
> By late June, most refineries increased processing after seasonal maintenance, benefiting from growing foreign demand
> Despite a production cut pledge, increased refining rates and strong exports indicate that the commitment isn't fully upheld
> Additionally, Russian refiners, drawing on state subsidies, could see a 50% cut by September for budget control. H1 2023 subsidies totaled 543 billion rubles ($6 billion)

Western Russian oil price nears G7’s price cap (BBG)
> The price of Russian oil at the western port of Novorossiysk is nearing the G7 price cap, set at $60/Bbl, for the first time since the cap's enforcement
> Urals crude traded at $57.70/Bbl on Friday, the highest since last November before the price cap was implemented, according to Argus
> Eastern Russian oil often exceeds the G7 price cap, impeding access to Western services, but Western prices have always traded lower due to loading-delivery port price gaps

Natural Gas

Natural gas prices are trading higher, around $2.70, after gaining 8.7c yesterday
> Lower 48 weather forecasts are mostly unchanged, although the South Central region’s forecast warmed by 8.8 °F over the two-week period
> Gas production is down about 1.3-Bcf/d today due to maintenance on REX and TGP in the Northeast

Fourth Circuit Court blocks Mountain Valley Pipeline (Reuters)
> The US Court of Appeals for the Fourth Circuit issued a stay ordering all construction on MVP to be stopped
> Equitrans released a statement saying that “The Court’s decision defies the will and clear intent of a bipartisan Congress and this Administration in passing legislation to expedite completion of the Mountain Valley Pipeline project”
> EQT also said that if the decision is not reversed, then MVP’s in-service date could be pushed beyond 2023
Proof once again that our government is "broken".

Texas Power demand in ERCOT to reach record highs again (Reuters)
> ERCOT is projecting record loads again as significantly warmer than average temperatures are expected to impact the state again this week
Total load is expected to reach 83.84-Gw on July 17 and 84.14-Gw on July 18, after setting a record on June 27 at 80.83-Gw

[SergioSays]

that 4th Circuit decision is tragicomic. Depressing.

[dan_s]

At the time of this post (10:50AM CT) WTI was up $1.85 to $74.84.

Trading Economics:
"WTI crude futures edged above $74 per barrel on Tuesday, recouping some losses from the previous session and hovering close to their highest levels in a month, as supply cuts by top crude exporters Saudi Arabia and Russia are expected to tighten the market. Last week, Saudi Arabia said it would extend its 1 million barrels-per-day cut to August, while Russia said it would cut oil exports by 500,000 bpd next month. In the US, authorities announced that they plan to purchase about 6 million barrels of oil for the Strategic Petroleum Reserve, with receipts scheduled for October and November 2023. Meanwhile, investors remain cautious ahead of key US inflation data and Chinese trade figures this week that could guide the demand outlook. The prospect of further interest rate hikes from the Federal Reserve also continued to weigh on market sentiment."

All we need is less Fear of Recession and WTI will push over $80/bbl this month.

[Fraser921]

I'd declare Marshall law and arrest these judges and anyone else getting in the way

[dan_s]

Closing Prices:
> Prompt-Month WTI (Aug 23) was up $1.84 on the day, to settle at $74.83
> Prompt-Month Henry Hub (Aug 23) was up $0.062 on the day, to settle at $2.731

IEA's "Oil Market Report" for July and the weekly EIA Petroleum reports should push WTI over $80 by the end of July.