The view from PV Mexico - Apr 4

[dan_s]

We had some trouble getting to Puerto Vallarta on Sunday, but all 5 couples arrived safe and sound. Beautiful weather.

Opening Prices:
> WTI is up $2.88 to $102.15/bbl, and Brent is up $2.54 to $106.93/bbl.
> Natural gas is up 6.6c to $5.786/MMBtu.
Good Job!

AEGIS Notes
Oil

Oil moved higher Monday morning as traders continued to weigh an ongoing supply deficit against governmental efforts to tame prices
> The world’s largest independent oil trader, Vitol, said that oil prices could be higher given the risk of supply disruption from Russia, but that the market is still trying to establish exactly how many barrels have been lost (Bloomberg)

WTI suffered its biggest weekly decline in over two years last week after the U.S. announced a record-setting release from its strategic petroleum reserve (SPR)
> The IEA and its member countries will also join the effort to add supply from stockpiles, with details expected this week
> AEGIS notes that the WTI curve structure has weakened as the government takes action to supply the market in the short term from SPR
> WTI backwardation, as measured between the prompt contract and the thirteenth contract, fell to 12% on Friday
> Backwardation (downward sloping) for the 12-month timespread, was closer to 20-25% for the month of March

Natural Gas

Natural gas prices are up this morning, trading 6.6c higher near $5.786
> U.S. lower-48 dry gas production touched 94 Bcf/d on Friday, its first time reaching the mark since early February
> U.S. LNG feedgas demand is at around 12.3 Bcf/d
> The gas-weighted heating degree day forecast for April is up by 11 HDDs near 333 HDDs

Russia maintained gas flows as Europe considers new sanctions
> European leaders have called for fresh new sanctions as war-crime allegations have surfaced
> The Kremlin has recently pressed for all payments to start being conducted in Roubles, which has added more uncertainty to gas flows