Energy Prospectus

Opening Prices:
> WTI is up 88c to $64.46/Bbl, and Brent is up 95c to $67.39/Bbl.
> Natural gas is down 7.1c to $2.835/MMBtu.

AEGIS Notes
Crude Oil

Despite some intraweek volatility, the Trend is still UP. Sellers are in Control below $64.25. Market Driven hedges are available at current prices. A Weekly close below $61.50 is needed to change the Trend to DOWN.

Canadian Crude Oil Update: https://aegis-hedging.com/insights/cana ... ude-update

Natural Gas

The Trend is UP. Sellers are in Control below $3.02. A change in Trend requires a Friday close below $2.88.
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Bloomberg -- Oil climbed toward $65 a barrel as Iran said gaps remain in reaching a deal that could end U.S. sanctions on its crude.

West Texas Intermediate futures were 2% higher, extending Friday’s gain. Iran said there are still differences around the timing of when countries will return to compliance with the original 2015 nuclear agreement. While the market is anticipating the Islamic Republic’s supply will pick up again by late summer, the demand recovery will be strong enough to absorb it, Goldman Sachs Group Inc said. The bank expects oil to hit $80 a barrel in the next few months.

Talks between Iran and world powers will continue in Vienna this week to resolve outstanding issues. As part of that process, Iran extended a UN nuclear inspections agreement, buying diplomats time to revive the landmark deal that would usher in an official return of the Persian Gulf nation to world oil markets.

Crude has been largely stuck between $60 and $70 a barrel recently. There are signs that demand in the West is recovering sharply with virus cases in the U.S. below 30,000 every day last week for the first time since June, though parts of Asia continue to see significant infections. The Organization of Petroleum Exporting Countries and its allies are also loosening output curbs.

“The specter of Iranian sanctions relief looms large over the oil market,” said PVM Oil Associates analyst Stephen Brennock. “Additional supply from Tehran is poised to be absorbed by the market as a result of a vaccine-spurred surge in demand over the coming months.”

Physical markets continue to get a boost from a raft of buying from refiners in Asia. Japan’s Fuji Oil became the latest company to buy Middle Eastern crude on Monday, after a spate of bullish interest last week.

Goldman isn’t alone in its view on the impact of returning Iranian supply. Citigroup Inc. said it expects only a partial return of the country’s barrels initially. The bank still sees oil hitting the mid-$70s in the third quarter, but said prices could retreat thereafter.

Interior OKs Trump-era drilling leases despite Biden freeze . E&E News . The Interior Department has issued dozens of oil leases sold in the final weeks of the Trump administration — and could issue over 200 more — drawing the ire of an environmental group that argues the move is a violation of the Biden administration's leasing freeze. President Biden ordered a moratorium on new oil and gas leasing shortly after taking office. That pause — which bars the regular auction of drilling rights in federal lands and waters — is in place while the administration conducts a comprehensive review of the federal oil and gas program that considers both the climate impacts and economic benefits of developing the country's vast stores of fossil fuels.

All eyes on Army Corps after Dakota Access dodges shutdown . E&E News . Tribes challenging the Dakota Access pipeline said they will be closely monitoring a crucial environmental review of the project after a federal judge on Friday declined to halt operation of the conduit. The decision from the U.S. District Court for the District of Columbia dealt a fresh blow to the Standing Rock Sioux and other tribes, which had asked the court to temporarily stop the flow of oil through the 1,172-mile pipeline as the Army Corps of Engineers completes a National Environmental Policy Act review underpinning a key easement for the project.

Biden admin defends oil and gas leasing freeze in court . E&E News . The Biden administration last week offered its opening arguments in a legal battle over its plans to assess the climate impacts of oil and gas leasing in public lands and waters. A coalition of 13 Republican state attorneys general has called for the U.S. District Court for the Western District of Louisiana to block the Interior Department from following through on President Biden's executive order that temporarily froze new leasing.

Closing Prices:
> WTI prompt month (JUL 21) was up $2.47 on the day, to settle at $66.05/Bbl. < Best day in six weeks.
> In contrast, NG prompt month (JUN 21) was down $0.020 on the day, to settle at $2.886/MMBtu.

This is the last week that the JUNE gas contract will be the front month. Longs must close their contracts this week. Plus, some traders view rising oil prices as a negative for gas on the assumption that more oil wells will be completed and bring on more "associated gas".