Oil & Gas Prices - June 23

[dan_s]

Opening Prices:
> WTI is down $1.22 to $68.29/bbl, and Brent is down $1.17 to $72.97/bbl.
> Natural gas is down -2.3c to $2.585/MMBtu.

AEGIS Notes
Oil

Oil heads for a weekly loss following Fed’s hawkish stance
> August ’23 WTI lost $1.22 this morning to trade around $69.29/Bbl
> Despite a larger-than-expected crude draw, oil prices fell over $3/Bbl, or 4.2% yesterday

Equities trade lower, while the dollar strengthened following hawkish comments from Fed Chair Powell and other central banks' rate hikes
> This week, Powell indicated that he sees at least two additional rate hikes before the year-end
> However, yesterday’s steady Initial Jobless Claims and slightly higher home sales reports indicated a strong US economy < Fear of the Fed remains high, but Fear of Recession should be fading. Unless we have a Major Global Recession, demand for oil-based products is going to exceed supply during 2H 2023. In yesterday's EIA Petroleum Report for the week ending June 16 I noted that U.S. Total Petroleum Inventories fell to a new 19 year low in the week ending May 19, 2023. Including the Strategic Petroleum Reserve, U.S. crude oil and oil-based refined product inventories declined by 528.1 million barrels from July 2020 to May 2023. At 1,589.5 million barrels in on May 19, 2023 the oil supplies that this country runs on were lower than they were going back to May, 2004.

EU Ramps Up Pressure on Russia with Latest Sanctions, Targets Shadow Oil Trade (SPGlobal)
> The EU unveils its 11th round of sanctions, targeting illegal Russian oil exports amid the Russia-Ukraine conflict
> New sanctions include restrictions on ship-to-ship transfers of Russian crude and a ban on crude flow via the Druzhba pipeline. Ships suspected of aiding such transfers risk being banned from EU ports
> An estimated 443 'shadow fleet' vessels face potential bans and further limit the movement of EU goods to Russia via third countries

Natural Gas

Natural gas prices are trading lower by 3%, heading for a lower weekly settlement
> The Winter ‘23/’24 strip is down 7c on the week to $3.50, while Summer ’24 is lower by 3c this week to $3.27
> Weather forecasts indicate that the significantly hotter-than-normal weather in the South Central region will continue over the next week, while below-normal temperatures in the Midwest and Northeast will also remain

US on track for significant growth in LNG exports (Reuters)
> Total US LNG exports are expected to climb to more than 22-Bcf/d by 2028, compared to a record of nearly 15-Bcf/d recorded this year
> The two facilities next expected to obtain financial approval are Delfin Midstream’s offshore project in the Gulf of Mexico, and Venture Global’s Calcasieu Pass 2 project
> The next facility expected to come online will be Exxon’s 2.4-Bcf/d Golden Pass facility in the first half of 2024 < This is ~6 months earlier than was expected a year ago.
> Some market observers have noted that Golden Pass may begin taking volumes sooner than expected

Debate over New England LNG import terminal (S&P)
> The Everett LNG import facility, located in Boston Harbor, has been used to shore up the gas supply in New England due to limited pipeline infrastructure in the region < Climate Change Wackos have blocked pipelines from Pennsylvania that could bring much cheaper U.S. gas to millions of consumers in New England. That region needs to elect smarter people.
> FERC members and stakeholders discussed whether the facility would be needed in a recent forum, although few conclusions were made
> For the facility to remain in operation, gas utilities must sign contracts to extend the current agreement beyond May 31, 2024
The Mystic natural gas power plant located adjacent to the facility is slated for retirement in June 2024

[dan_s]

Closing Prices:
> Prompt-Month WTI (Aug 23) was down $-0.35 on the day, to settle at $69.16
> Prompt-Month Henry Hub (Jul 23) was up $0.121 on the day, to settle at $2.729 < Hang on to those "gassers".