Energy Prospectus

Opening Prices:
> WTI is up 59c to $67.18/Bbl, and Brent is up 76c to $69.79/Bbl.
WTI crude futures bounced back to $67 per barrel on Wednesday after four days of declines, after the API reported a fall in US crude oil and gasoline inventories last week. < My Take is that all of the Covid Gloom & Doom noise each weekend is causing oil to trade lower on Mondays and then the storage reports from API and EIA mid-week bring back the fact that the oil market is still tight. Demand growth for oil based products has slowed, but still drifting higher. Oil demand is seasonal and it does go down a bit in September & October before heating oil demand picks up in November.

> Natural gas is up 1.2c to $3.849/MMBtu.

AEGIS Notes
Oil

Oil prices rose Tuesday morning by nearly 1% after a four-day decline driven by worries about energy consumption due to the coronavirus surge
> WTI’s retreated to $67 yesterday, down almost 4% in four days, the longest losing run since March
> The U.S. dollar has also hit commodities as the currency’s spot index hit 93.13; the highest level since late March for the greenback. Crude oil is priced in dollars, so a stronger dollar makes oil more expensive for buyers

EIA crude oil inventory data is due at 9:30 am
Bloomberg survey estimates
U.S. crude oil inventories: -1,626 MBbl
U.S. gasoline inventories: -2,298 MBbl
U.S. distillate inventories: +161 MBbl
U.S. refinery utilization: +0.23%

Natural Gas

Gas futures are trading near their lowest levels in a month, with the prompt contract currently printing around $3.84 < This compares to the ngas price I am using in all of my forecast models of $3.50 for Q3 and $3.75 for Q4. Ngas prices in some regions are already much higher.
Week-ahead weather forecasts have whipsawed this week with the total degree-day count starting at 70 on Monday, then climbing to 95 on Tuesday, before losing 18 overnight to bring the total to 77 this morning
Feedgas demand at U.S. LNG facilities has been hovering around 11 Bcf/d for a 17%, or 1.3 Bcf/d week-over-week increase < This is the KEY STAT to my prediction that we are going to see a VERY TIGHT ngas market this winter that will result in a "Bidding War" for gas supply.

FERC approves in service of Williams’ Transco Leidy South Project
The project will enable Transco to provide 582,400 MMcf/d of transportation capacity for natural gas sourced from northern and western Pennsylvania to markets in Transco’s Z5 and Z6. The project is expected to enter full commercial operations around December 1, 2021. < Very good news for AR, EQT, RRC and COG which is merging with XEC.

U.S. natural gas exports to exceed natural gas imports in 2021. Houston Chronicle
U.S. natural gas exports are rising as companies sell more LNG to Asia & Europe and more gas via pipeline to Mexico. Exports will exceed imports in 2021 by an average of 11 billion cubic feet per day, nearly double the 2020 average of 7.5 billion cubic feet per day, according to the Energy Department. Annual LNG exports are expected to outpace pipeline exports by an estimated 0.6 billion cubic feet per day this year for the first time since U.S. LNG exports from the Lower 48 states began from Houston-based Cheniere’s Sabine Pass export terminal in La. in February 2016.

Closing Prices:
> WTI prompt month (SEP 21) was down $1.13 on the day, to settle at $65.46/Bbl. < Remember that earlier in the year I said the "Right Price" for WTI was $65/bbl. We need to see some news that says the Covid Delta Variant is under control for this trend to reverse. The stocks are trading as if WTI is back to $50/bbl.
> In contrast, NG prompt month (SEP 21) was up $0.015 on the day, to settle at $3.852/MMBtu. < Natural gas prices are holding well above what I am using in my forecast models.

The fear index is rising. I wouldn’t be surprised to see the Dow & Qqq fall 10 per cent. Would a 1500 point drop surprise anyone?

A crisis in USA leadership is real . This could go sideways fast. He needs to resign now.

Total disaster