Energy Prospectus

I hope all of you had an enjoyable Christmas. Susan & I spent two days in Dallas with the American grandchildren, which was a reminder of how difficult it is to raise small children. The 1-year old is walking and falling every minute. It is amazing that the human race has survived since children seem determined to do dangerous things. We had a good time, ate too much and got home safely. Hwy 45 was packed going both ways, but much lighter truck traffic made for an easier than normal drive.

Back to work.

Opening Prices:
> WTI is down 42c to $73.37/Bbl, and Brent is up 48c to $76.63/Bbl.
> Natural gas is up 16.2c to $3.893/MMBtu.

AEGIS Notes
Oil

West Texas Intermediate was 1% lower Monday morning after thousands of flights over the holiday weekend were canceled
> Rising COVID-19 cases caused U.S. airlines to cancel more than 1,000 flights on Sunday (Reuters)
> The number of available flight crews was limited too, due to mandatory quarantine periods

Nuclear talks between Iran and world powers resume in Austria on Monday, with the main focus being the lifting of all U.S. sanctions in a verifiable process, Iran’s foreign minister said
> “The most important issue for us is to reach a point where, firstly, Iranian oil can be sold easily and without hindrance,” Iranian media quoted Foreign Minister Hossein Amirabdollahian as saying (Reuters)
> AEGIS notes that Iran has about 1.5 MMBbl/d of oil exports that could hit the market if a full deal is reached
MY TAKE: Any deal with Iran is not worth the paper it is written on because they won't comply. I also believe that Iran is and has been selling a high percentage of their oil anyway. China is a willing buyer that is not afraid of Team Biden. Any deal that does not require a complete shutdown of Iran's nuclear enrichment program will go down in history as the dumbest deal ever made by the U.S.

Natural Gas

The prompt-month (Jan ’22) Henry Hub contract is up by 16.2c, near $3.893
> Gas prices have been resilient despite weather forecasts that continue to tilt warmer. This December is now on track to be one of the warmest, going back to 1950
> Further, U.S. lower-48 dry gas production rose above 96 Bcf/d over the weekend, its highest in over a month, and this morning’s nominations show it holding around 95.7 Bcf/d
> LNG feedgas demand has averaged around 12.6 Bcf/d over the last four days

Russian gas continues to flow in reverse on the Yamal-Europe pipeline
> The pipeline normally brings gas from Russia to western Europe but has been flowing in reverse for the last seven days
> President Vladimir Putin said last week that Germany was reselling Russian gas to Poland and Ukraine rather than relieving an overheated market, saying German gas importers are at fault for soaring prices.
MY TAKE: Putin's "Blame Game" is funny. It won't matter who is to blame when people in Northern Europe are forced to burn wood (including furniture) to survive the winter.

Within two hours after the market opened WTI spiked up more than $2/bbl. WTI trading at $75.81 at the time of this post.

NEW YORK (Reuters) -Oil prices rose around 3% on Monday due to hopes that the Omicron COVID-19 variant will have a limited impact on global demand in 2022, even as surging cases caused flight cancellations https://www.reuters.com/markets/stocks/ ... 2021-12-27.

Global benchmark Brent crude rose $2.53, or 3.3%, to $78.67 a barrel by 11:01 a.m. EST (1601 GMT). U.S. West Texas Intermediate (WTI) crude rose $2.01, or 2.7%, to $75.80 a barrel. The U.S. market was closed on Friday for a holiday.

Oil, which plunged by more than 10% on Nov. 26 when reports of a new variant first appeared, gained last week after early data suggested that Omicron could cause a milder level of illness.

"Though Omicron is spreading faster than any COVID-19 variant yet, a relatively relieving news is that most people infected with Omicron are showing mild symptoms, at least so far," said Leona Liu, analyst at Singapore-based DailyFX.

More than 1,300 flights were cancelled by U.S. airlines on Sunday as COVID-19 reduced the number of available crews while several cruise ships had to cancel stops.

"The disruption to goods and services from isolating workers, notably air travel, seems to be the main fallout so far," Jeffrey Halley, analyst at brokerage OANDA, said of rising Omicron cases. "That is only likely to cause short-term nerves, with the global recovery story for 2022 still on track."

Brent has risen by more than 45% this year, supported by recovering demand and supply cuts by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+.

Talks resume on Monday between world powers and Iran on reviving Tehran's 2015 nuclear deal. Iran said oil exports were the focus of the talks, which so far appear to have made little progress on boosting Iran's shipments.

Also on investors' radar is the next OPEC+ meeting on Jan. 4, at which the producer alliance will decide whether to go ahead with a planned 400,000 barrels-per-day (bpd) production increase in February.

OPEC+ stuck to its plans at its last meeting to boost output for January despite Omicron.

WTI Q 4 is

oct is 81.48
nov is 79.15
dec 20th is 69.97

avg to date (20 th) 77.70

I think we see 80 soon