Oil & Gas Prices - July 12

[dan_s]

Opening Prices:
> WTI is down $4.58 to $99.51/bbl, and Brent is down $4.38 to $102.72/bbl.
> Natural gas is up 25.3c to $6.679/MMBtu.

AEGIS Notes
Oil

OPEC+ released their monthly report for July. The group maintained its forecast for 2022 oil demand growth at +3.36 MMBbl/d, but highlighted that 2H22 demand is anticipated to be lower due to China's Covid-19 resurgence
> The group forecasts that global demand will increase by 2.7 MMBbl/d in 2023 at a slower rate than this year, while non-OPEC liquids production growth in 2023 is forecast to be 1.7 MMBbl/d < Obviously, demand cannot exceed supply for long. Above ground oil and refined product inventories are below normal levels and they will keep falling. This includes OECD Strategic Petroleum Reserves.
> The data revealed that after declining in May, OPEC output increased by 234 MBbl/d to 28.72 MMBbl/d in June < Still below OPEC+ quotas.
> To balance supply and demand, OPEC would need to produce an average of 30.1 MMBbl/d in 2023. That’s 1.38 MMBbl/d more than the cartel’s 13 nations pumped in June

A global strain on the energy supply that has resulted in crippling shortages and surging fuel and power prices could grow worse, according to the head of the IEA
> "The world has never faced a catastrophic energy crisis of this depth and complexity." "This is affecting the entire planet; we may not have seen the worst of it yet" said IEA Director Fatih Birol at the Sydney Energy Forum
> Birol also cautioned that this winter in Europe will be challenging in terms of energy supply and may have “serious implications for the global economy”

Natural Gas

Marathon seeks more time to build LNG import project in Alaska (Reuters)
> Marathon Petroleum Corp's Trans-Foreland Pipeline Co unit wants more time to convert the Kenai liquefied natural gas (LNG) export plant in Alaska into an import terminal
> FERC said that Trans-Foreland last week sought an extension until December 2025 versus its mandated in-service date of December 2022
> The company has not reached a final investment decision as the COVID-19 pandemic, and the war in Ukraine have worsened economic and supply chain conditions

Record temperatures are adding pressure to the natural gas market (NGI)
> Parts of the southern U.S. are sustaining temperatures above 100 degrees this week, with 2022 setting a record for cooling degree days
> On Monday, in Texas ERCOT warned that demand for electricity might temporarily exceed generation capacity, with rolling blackouts a possibility
> Widespread heat is expected again by the weekend and deep into next week, NatGasWeather said. "Hot high pressure will rule most of the U.S.," with dangerous heat in parts of Texas and the Southwest deserts.
> Higher temperatures can also lead to lower efficiency in liquid natural gas processing