Oil & Gas Prices - July 21
Posted: Wed Jul 21, 2021 8:35 am
Opening Prices:
> WTI is up $1.15 to $68.35/Bbl, and Brent is up $1.23 to $70.58/Bbl.
> Natural gas is up 3.7c to $3.913/MMBtu. WOW!!!
AEGIS Notes
Oil
Oil futures try and claw back losses sustained on Monday, with WTI up $1.01 Wednesday morning to $68.43
> The gains have come across multiple asset classes as U.S. and European Index futures moved higher
> Commodities are set to rebound sharply after their recent rout unless there are widespread lockdowns to the now dominant delta variant, according to Goldman Sachs (Bloomberg)
Talks between Iran and the U.S. to revive the 2015 nuclear agreement have stalled due to domestic Iranian interference, according to Ali Rabiei, an Iranian government spokesman (Bloomberg)
> Iran’s government said the interference was responsible for stalling President Hassan Rouhani’s efforts to reach a deal. Rabiei cited a bill, which compelled Iran’s government to significantly expand atomic activity and limit nuclear inspection, that had complicated the negotiations. < MY TAKE: If Team Biden is stupid enough to do anything that allows Iran to get weapons grade uranium, they could go down in history as the worst administration EVER.
> AEGIS notes that Iran has between 1.5 and 2 MMBbl/d of exports that could re-enter the global market over 9-12 months if sanctions were lifted and remain one of our largest bearish risks within our Factor Matrix
Natural Gas
The prompt-month Henry Hub contract (Aug ’21) is at its highest level since December 2018, and its highest seasonal level since 2014, trading near $3.95 < As I have told you in many of my podcasts, the price of natural gas spiked to $4.70/MMBtu in Q4 2018 because winter was approaching and the amount of gas in U.S. storage was below the 5-year average. THAT IS ALMOST SURE TO HAPPEN AGAIN THIS YEAR.
> Weather patterns have shifted warmer since last Friday, with the total degree count increasing by 12.1 CDDs since last Friday
> The increase in Degree Days can be attributed to greater heat in California, the U.S. Midwest, and Northeast during the 1–5-day range, according to CWG
European gas prices also post strong rebound as heatwave hits parts of the continent. Gas prices in the U.K. and the Netherlands jumped by over 3% after posting a loss on Tuesday, as weather forecasts turned warmer causing the U.K. Met Office to issue its first-ever extreme heat warning
> Europe is already strained for gas with inventory levels well below their five-year average, and Russia flowing less gas to the country through Ukraine
> European countries have also been forced to outbid Asian buyers in the LNG spot markets < As long as LNG exports from the U.S. remain at capacity, there is no chance to refill gas storage to the level necessary to make it through a cold winter without some regional shortages. This is what causes bidding wars between the utilities for physical supply. Natural gas spot prices on the West Coast have already spiked to over $6/MMBtu.
> WTI is up $1.15 to $68.35/Bbl, and Brent is up $1.23 to $70.58/Bbl.
> Natural gas is up 3.7c to $3.913/MMBtu. WOW!!!
AEGIS Notes
Oil
Oil futures try and claw back losses sustained on Monday, with WTI up $1.01 Wednesday morning to $68.43
> The gains have come across multiple asset classes as U.S. and European Index futures moved higher
> Commodities are set to rebound sharply after their recent rout unless there are widespread lockdowns to the now dominant delta variant, according to Goldman Sachs (Bloomberg)
Talks between Iran and the U.S. to revive the 2015 nuclear agreement have stalled due to domestic Iranian interference, according to Ali Rabiei, an Iranian government spokesman (Bloomberg)
> Iran’s government said the interference was responsible for stalling President Hassan Rouhani’s efforts to reach a deal. Rabiei cited a bill, which compelled Iran’s government to significantly expand atomic activity and limit nuclear inspection, that had complicated the negotiations. < MY TAKE: If Team Biden is stupid enough to do anything that allows Iran to get weapons grade uranium, they could go down in history as the worst administration EVER.
> AEGIS notes that Iran has between 1.5 and 2 MMBbl/d of exports that could re-enter the global market over 9-12 months if sanctions were lifted and remain one of our largest bearish risks within our Factor Matrix
Natural Gas
The prompt-month Henry Hub contract (Aug ’21) is at its highest level since December 2018, and its highest seasonal level since 2014, trading near $3.95 < As I have told you in many of my podcasts, the price of natural gas spiked to $4.70/MMBtu in Q4 2018 because winter was approaching and the amount of gas in U.S. storage was below the 5-year average. THAT IS ALMOST SURE TO HAPPEN AGAIN THIS YEAR.
> Weather patterns have shifted warmer since last Friday, with the total degree count increasing by 12.1 CDDs since last Friday
> The increase in Degree Days can be attributed to greater heat in California, the U.S. Midwest, and Northeast during the 1–5-day range, according to CWG
European gas prices also post strong rebound as heatwave hits parts of the continent. Gas prices in the U.K. and the Netherlands jumped by over 3% after posting a loss on Tuesday, as weather forecasts turned warmer causing the U.K. Met Office to issue its first-ever extreme heat warning
> Europe is already strained for gas with inventory levels well below their five-year average, and Russia flowing less gas to the country through Ukraine
> European countries have also been forced to outbid Asian buyers in the LNG spot markets < As long as LNG exports from the U.S. remain at capacity, there is no chance to refill gas storage to the level necessary to make it through a cold winter without some regional shortages. This is what causes bidding wars between the utilities for physical supply. Natural gas spot prices on the West Coast have already spiked to over $6/MMBtu.