Oil & Gas Prices - May 19

[dan_s]

Opening Prices
> WTI is down $1.26 to $64.23/Bbl, and Brent is down $1.27 to $67.44/Bbl.
> Natural gas is down 2.3c to $2.989/MMBtu.

AEGIS Notes
Crude Oil

Severe weather strikes Gulf Coast, knocks off USGC refining capacity
According to Reuters, four refineries slowed production this week as the region was battered by heavy rainfall and flooding
The most significant disruption was Total SE's 225MBbl/d Port Arthur, Texas, refinery. The entire plant was knocked out of production by a brief power loss on Monday, according to Reuters

Iran to start oil exports from a new port that allows it to avoid the Strait of Hormuz; Nuclear resolution talks progress < So, the U.S. is negotiating with Iran to ease sanctions and probably give them $Billions while they are behind the attacks on Israel. We are in "Upside Down World" now.
According to India's National Oil Co., it will begin shipping its crude from the Jaks terminal on the Gulf of Oman next month
Russia's ambassador to the International Atomic Energy (IEA), Agency Mikhail Ulyanov, stated the two sides have made "significant progress" towards a deal and that an "important announcement" will be made on May 19

EIA weekly data is due at 9:30 am CST < Keep in mind that this weeks and next weeks EIA Petroleum report will be impacted by the shut down of the Colonial Pipeline system.
U.S. Crude Inventories: + 1,310 MBbls (Avg. Bloomberg surveys)
U.S. Gasoline Inventories: - 63 MBbls
U.S. Distillate Inventories: - 588 MBbls
U.S. Refinery Utilization: - 0.96% change

Natural Gas

The US Energy Information Administration is expected to report a 59 Bcf injection for the week ended May 14, according to a survey of economists via Bloomberg
A 59 Bcf injection would be less than the five-year average of 86 Bcf build and last year’s 84 Bcf increase
Since the beginning of the injection season, gas stocks have risen nearly 100 Bcf less than they have on average over the last five years. This trend may continue as production growth moves sideways around 90.5 Bcf/d, and export demand is expected to remain robust
The EIA plans to release its weekly storage report on May 20

The Biden administration will waive sanctions on the entity overseeing Russia’s Nord Stream 2 pipeline into Germany (Axios)
The Axios report cites the Biden administration not wanting to damage the U.S./Germany relationship
Nord Stream 2 is a 5.3 Bcf/d twin pipeline that will provide an alternate route for Russian gas to reach Western Europe
The project could be completed as early as this summer without major intervention to stop it, according to Axios

[dan_s]

Closing Prices:
> WTI prompt month (JUN 21) was down $2.13 on the day, to settle at $63.36/Bbl.
> NG prompt month (JUN 21) was down $0.048 on the day, to settle at $2.964/MMBtu.

WTI bounce back quickly off the low of $61.98. Today's trading range was $61.98 to $65.34. Wild days are during BIG oil price cycles and this one is as big as it gets. Headline driven moves rarely hold up.

I expect tomorrow's EIA report on natural gas storage to show an expansion of the deficit to the 5-year average from 72 Bcf to ~100 Bcf.