Energy Prospectus

Opening Prices
> WTI is down 29c to $92.02/Bbl, and Brent is up 1c to $93.28/Bbl.
> Natural gas is down 21.4c to $4.358/MMBtu.

AEGIS Notes
Oil

Oil futures eased Monday morning following seven weekly gains that launched crude to its highest level since 2014
> Market participants are focused on Iranian nuclear talks as the U.S. provided several sanctions waivers
> Total active U.S. oil rigs now stand at 497, up by two from the prior week. Oil-directed rigs are now 198 above this time last year

Iran wants guarantees from the U.S. for a Nuclear deal to move forward (Bloomberg)
> U.S. Secretary of State Antony Blinken signed several sanctions waivers Friday related to Iran’s civil nuclear activities, according to the AP
> The waivers will exempt foreign countries and companies that work in Iran’s civilian nuclear sector from American penalties
> The U.S. hadn’t provided full sanctions relief, a State Departments spokesman said
And all the U.S. got in return was .... nothing. Showing weakness is not the best negotiating style.

Vitol says China may need to rebuild its oil stockpiles
> Oil prices could be boosted by China potentially replenishing its inventories (BBG)
> “All eyes are on what happens in China after the Chinese New Year. There’s a feeling that some restocking will be required.”
> For China, the world's biggest oil importer, prices aren’t yet high enough to dent consumption, according to Vitol’s head of Asia, Mike Muller

Natural Gas

Natural gas futures are down this morning as weather forecasts have titled more bearish
> The prompt-month (Mar' 22) Henry Hub contract is down by 21.4c, trading near $4.358
> The gas-weighted heating degree day forecast fell by 16 HDDs over the weekend to 760 HDDs

LNG feedgas demand is above 13 Bcf/d this morning, as gas flowing to Calcasieu Pass continues to ramp up. The facility recorded a record-high of 250 MMcf/d, according to this mornings pipeline nominations
> Cheniere's Sabine Pass Train 6 is officially approved for startup, and Bechtel has turned control over
> Lower-48 dry gas production is up by 2 Bcf/d from Friday's level of 88.4 Bcf/d, near 90.8 Bcf/d

China will increase its imports of Russian natural gas by 26% once the West Route pipeline is completed
> Russia will supply CNPC with an additional 4.6 Bcf/d of gas
> The pipeline, which began construction in 2015, is expected to be completed around 2030

DUBAI (Reuters) -Iran said on Monday that Washington had to make a "political decision" regarding lifting sanctions on the Islamic Republic as Tehran's demand for their full removal to revive a 2015 nuclear deal with world powers was non-negotiable.

After eight rounds of indirect talks between Tehran and Washington since April, differences remain about the speed and scope of lifting sanctions on Tehran, including Iran’s demand for a U.S. guarantee of no further punitive steps, and how and when to restore curbs on Iran’s atomic work.

The talks paused on Jan. 28 as top negotiators returned to their respective capitals for consultations. U.S. Special Envoy for Iran Robert Malley on Sunday said he would soon return to Vienna, insisting the pact could still be revived.

"The issue of removal of sanctions and Iran benefiting from it is Iran's red line in the talks," Iranian foreign ministry spokesperson Saeed Khatibzadeh told a weekly a news conference. < What is Team Bidens "red line"?

"If the U.S. returns to Vienna with a political decision and a specific agenda ... to remove the sanctions, then surely it will be possible to reach a deal quickly."

Comments from Bloomberg

Oil fluctuates as red-hot rally cools after seven weekly gains.
Brent oil fluctuated in Asian trading following a run of seven weekly gains that’s pushed crude to the highest level since 2014. Futures in London swung between gains and losses after climbing as high as $94 a barrel. Oil’s market structure is flashing signs of tighter supplies and inventories at key storage hubs are falling. Saudi Arabia signaled confidence in the outlook for robust demand continuing by raising its crude prices for customers in Asia, the U.S. and Europe for March. The tight oil market is being reflected at the pump. In the U.S., the average price of gasoline rose to the highest level in more than seven years, according to data from the AAA. That poses a fresh challenge to President Joe Biden as he tries to combat surging energy costs.

U.S. shale is back to booming.
Output in the U.S. shale patch is “re-booming” this year, with research and data analysis firm Lium LLC forecasting production will surge by more than 1 million barrels a day. That’s the most bullish industry forecast yet. By comparison, the Energy Information Administration says the U.S. will end the year producing about 630,000 barrels a day more than January levels; ConocoPhillips predicts output will grow by as much as 900,000 barrels a day in 2022. The addition of more than 1 million barrels a day would represent the region’s largest expansion of output since 2018, according to Lium.