Energy Prospectus

Opening Prices:
> WTI is up 61c to $77.60/Bbl, and Brent is up 75c to $80.75/Bbl.
> Natural gas is up 8.4c to $3.801/MMBtu.

AEGIS Notes
Oil

Brent futures trade over $80/Bbl after the market digests OPEC+’s decision to increase production for February
> Oil prices finished 2021 strong as a handful of global supply outages helped boost sentiment (BBG)
> Facts Global Energy, a consulting firm, said the disruption totaled close to 1 MMBbl/d

Nuclear talks between the U.S. and Iran have made some “modest progress,” U.S. State Department spokesman Ned Price said in a press briefing Tuesday (Bloomberg) < Does Ned honestly think Iran is going to abide by any agreement?
> Discussions have aimed at reviving the 2015 agreement between Iran and world powers restarted Monday in Vienna after a holiday pause
> “There has been some progress relative to the beginning of December in identifying the hard issues left to be negotiated,” Price said < So, up until now we didn't know what "the hard issues left to be negotiated" were??? Here they are (1) Stop enriching uranium, (b) stop funding terrorist groups and (c) stop telling the world you are going to wipe Israel off the map.
> The outcome of the nuclear talks will likely have a large impact on the global oil market in 2022

Natural Gas

The prompt-month Henry Hub contract is up by 8.4c this morning, near $3.801
> This week, gas prices have shown plenty of volatility as weather forecasts have been mixed between bullish/bearish. Overnight weather runs knocked the total gas-weighted January heating degree day forecast 2.5 HDDs lower to 942
> The HDD forecast total is still up 12 HDDs from last Friday’s mark of 930
> U.S. lower-48 dry gas production is still down by around 3 Bcf/d week-over-week, according to this morning pipeline nominations

The U.S. became the world's largest LNG exporter last month as deliveries surged to energy-starved Europe
> U.S. LNG facilities’ output surpassed both Qatar and Australia as flows to Sabine Pass LNG jumped due to Train-6 commissioning
> The shale gas revolution has transformed the U.S. from a net LNG importer to a top exporter in less than a decade
> The U.S.’s position may be short-lived, as it came in slightly above Qatar. Any production issues are likely to change the rankings

Regarding IRAN:

Many of us have suspected that Iran was smuggling oil in violation of sanctions as the below Washington Post article reveals. My only question is How Much have they been able to smuggle, or just plain sell to China. If some nuclear deal is reached, is there really that much more oil that will hit the markets? Of course a deal will mean Iran can make a lot more money off of legitimate oil exports. I for one have no doubt they will violate any agreements before they are even signed. Do the UN Inspectors think they've really found every underground facility?

Bottom Line: How much crude can Iran really add to the markets today?

https://www.washingtonpost.com/world/mi ... story.html

Maybe it's time for a new Policy, as we are losing control of our ability to both control the payment system (SWIFT) and in our ability to unilaterally enforce (China/Russia teaming up).

How about a Policy of not telling every other country what to do, including IRAN and Israel.

Do we really think Iran is that stupid? If we think that, why do we think that? IRAN wants to take advantage of John Kerry's stupidity and get paid twice: Once for the oil and a second time for saying that they won't enrich uranium but will do so anyway.

Not Pro-Iran here, we've seen this sanction crap before and it works as well as surgical masks and vaccines on Covid.

My opinion is that Iran has no fear of Team Biden and they have no intention of slowing down their uranium enrichment program. Behind closed doors they are laughing at America and they are "playing" Team Biden for the fools that they are.