Oil & Gas Prices - May 25

[dan_s]

Opening Prices:
> WTI is down 30c to $65.75/Bbl, and Brent is down 21c to $68.25/Bbl.
> Natural gas is up 0.5c to $2.891/MMBtu.

AEGIS Notes (news impacting the global oil & gas markets)
Crude Oil

India's May oil imports, refinery runs reveal the full impact of COVID resurgence on oil demand - Platts
India's surge in COVID-19 cases began in early April, though the number of regional lockdowns started to increase only towards the latter part of the month and early May
The market is gaining a better understanding of the impact COVID-19 had on domestic oil demand, with the country's NOC saying that its gasoline and diesel sales had fallen by around 15%-20% thanks to the latest wave

World powers will convene today for the fifth round of negotiations to revive Iran nuclear deal
Ali Rabiei, a spokesman for the Iranian government, said, "we're optimistic that some small details and operational affairs will be resolved in the not-so-distant days ahead."
The extension of a key nuclear monitoring pact by Iran has given parties an additional month to negotiate and try and reach a consensus
AEGIS notes that Iran still poses the largest near-term risk to oil prices

PEMEX purchases 50% stake at Shell's Deer Park refinery
PEMEX originally bought half of the refinery in 1993 for over $200 million
The transaction will be fully financed by the Mexican government and is scheduled to close in 4Q2021

Natural Gas

Forward global LNG prices are strong and continue to widen into 2022
The spread between the Dutch TTF and Henry Hub stands at about $5.75/MMBtu and the JKM-Henry Hub spread is at $7.30/MMBtu at the start of the fall
Beyond the fall and into 2022, those spreads are trending wider; Platts data shows
“Beyond this year, we continue to see a multiyear recovery in the global LNG market and upside to out-year forwards,” Morgan Stanley said in a note to clients May 16
AEGIS notes that profitable LNG arbitrage will incentivize US LNG facilities to run at their highest rates manageable and possibly delay or take little maintenance < This is one of the BIG KEYS to U.S. natural gas prices moving higher. A HOT SUMMER will be the other primary driver.

Lawmakers in Texas advance eight bills but offer differing solutions concerning gas system weatherization
Senate Bill 3 has already passed the upper chamber, but the House State Affairs Committee added additional requirements for natural gas facilities to properly prepare for extreme weather (Texas Tribune)
House Bill 3648 would require the designation of certain gas facilities as critical infrastructure during an energy emergency, according to Platts

[dan_s]

Closing Prices:
> WTI prompt month (JUL 21) was up $0.02 on the day, to settle at $66.07/Bbl.
> NG prompt month (JUN 21) was up $0.027 on the day, to settle at $2.913/MMBtu. < The JUL21 contract, which will soon be the front month closed at $2.993