Energy Prospectus

Opening Prices:
> WTI is up 101c to $73.99/Bbl, and Brent is up 71c to $75.47/Bbl.
> Natural gas is up 10.5c to $3.735/MMBtu. < AUG21 is now the front month NYMEX contract

AEGIS Notes
Crude Oil

OPEC delays its Joint Ministerial Monitoring Committee (JMMC) by a day to allow more time to reach a consensus
The meeting will now take place on Thursday, July 1, the same day as its main policy meeting
According to Bloomberg, Moscow and Saudi Arabia hold different stances on returning output. Saudi Arabia has held a much more cautious stance than the Kremlin, as the country is more dependent on oil prices. The kingdom has called for a more gradual output hike
Many analysts expect that the group will return 550 MBbl/d or 10% of its current spare capacity back onto the market

U.S.-Iran nuclear negotiations postponed as atomic talk progress slows (Bloomberg)
Envoys won't convene for their seventh round of talks in Vienna this week, as Iran has failed to extend a stop-gap nuclear monitoring pact
Europeans have warned that the longer that talks run, the more events on the ground will complicate the negotiation process.
Iranian proxy forces and the U.S. military have exchanged attacks along the Iraqi border this week < We are in a shooting war with Iran, so why are we even talkng about lifting sanctions???

EIA weekly data is due at 9:30 am CST
U.S. Crude Inventories: - 4,418 MBbls (Avg. Bloomberg surveys)
U.S. Gasoline Inventories: - 757 MBbls
U.S. Distillate Inventories: + 707 MBbls
U.S. Refinery Utilization: + 0.39% change

Natural Gas

Natural gas is up 24% for the month of June and has made gains for six consecutive days, and touched as high as $3.81

Supreme Court rules New Jersey cannot block construction of the PennEast natural gas pipeline on state lands
The 5-4 decision upholds PennEast’s authority, granted by the federal government, to seize state-owned land for the pipeline route through eminent domain, without the state’s consent
The FERC approved, 116-mile, 1.1 Bcf/d PennEast Pipeline project runs from Pennsylvania into New Jersey, and is expected to bring phase one into service in 2022 and phase two by 2023

The EIA is expected to report a 63-Bcf injection for the week ending June 25, which would be near the five year average for the week of 65 Bcf
Analysts estimates ranged from a build of 48 Bcf to 73 Bcf
A build within this range would bring total stocks near 2.545 Tcf and the deficit to the five-year average near 156 Bcf

By Kevin Crowley based in Houston
(Bloomberg) -- U.S. shale producers are remaining
disciplined with their spending and won’t overwhelm OPEC as the
cartel contemplates bringing spare supplies back to the market,
according to ConocoPhillips.
“Discipline is holding and we don’t really see today a
pathway where the U.S. starts to overwhelm such that OPEC would
get concerned,” Chief Executive Officer Ryan Lance said in a
presentation to analysts Wednesday.
The restraint shale producers have shown since the
pandemic-driven market crash last year has been decisive in the
oil market’s rebound. U.S. crude stockpiles at the nation’s main
storage and distribution hub in Cushing, Oklahoma, have plunged
to their lowest since March 2020.
Also See: Key U.S. Oil Storage Hub Seen Depleting as
Producers Hold Tight
Only when OPEC and its allies return all their curtailed
supply to the market, will U.S. shale consider responding with
production increases of its own, Lance said.
“We need to see what the price does” then, he said. “That
will be a signal to the U.S. tight oil group as to how much
demand there is for U.S. crude.”

All eyes now on OPEC+

OPEC Secretary-General Mohammed Barkindo said on Tuesday that oil consumption in the second half of 2021 was expected to be 5 million barrels per day higher than in the first.

He said oil inventories in developed countries in the OECD, or Organization of the Economic Cooperation Development, were below the 2015-19 average now.

Oil Bulls Eye OPEC As U.S. Crude Heads for Best Quarter in a Year

Read more: https://www.investing.com/news/commodit ... ar-2546732