Energy Prospectus

Opening Prices:
> WTI is up $0.23 to $110.83/bbl, and Brent is up $0.12 to $113.05/bbl.
> Natural gas is down -3.2c to $4.73/MMBtu.

AEGIS Notes
Oil

Volatility continues in the oil markets as Brent crude reached nearly $120/Bbl before paring gains Thursday morning to $107
> WTI touched its highest since 2008 at $116.57
> Buyers of oil are continuing to avoid Russian crude as they try to navigate financial sanctions (BBG)
> There is speculation that Iran may get a nuclear deal within the next 72 hours < Team Biden will release $Billions to the world's #1 terrorist. Is getting gasoline 10 cents a gallon cheaper worth it?
> Iranian oil journalist Reza Zandi tweeted “definitive news that within the next 72 hours, the nuclear deal will be signed in Vienna.”

OPEC and its allies have decided to stick with the 400 MBbl/d production increase that was scheduled for April
> As the globe experiences high oil prices, the IEA’s Executive Director Fatih Birol said, “In a word, it was disappointing. I think we’ll leave it at that,”
> Outside of OPEC’s ability to increase supply, Iran is the quickest source of oil the market can consume
MY TAKE: OPEC+'s "official quota" for oil supply increases is a worthless number. Millions of barrels of Russian oil are now off the market and all but a few of the OPEC countries have any remaining production capacity.

Natural Gas

Natural gas prices are down this morning, with the prompt contract trading 4c lower, near $4.73
> The move lower comes despite promising changes in the weather forecasts. The March 2022 gas-weighted heating degree day forecast increased by 4 HDDs to 590 HDDs
> The EIA is expected to report a withdrawal of 137 Bcf for the week ending February 25 < Actual draw was 139 Bcf
> The weaker draw on stocks comes amid an impressive recovery in production that coincides with low wind-powered electricity generation
> If confirmed, the draw would bring inventories to 1,645 Bcf
> The ICE end-of-season inventory number, a proxy for where traders see inventory levels heading into summer, is now at 1,390 Bcf < 272 Bcf below the 5-year average storage level to begin the refill season. Important point is the refilling storage is a large part of demand.

Top U.S. lawmakers will grill democratic energy regulators
> The energy regulators recently approved guidelines for approving new natural gas projects that allows consideration of environmental justice, landowner, and climate issues < More regulations = less supply and higher gas prices.
> Three of the five members of the Federal Energy Regulatory Commission (FERC) voted in February to approve the guidelines that analysts say could present hurdles for new gas projects
> Richard Glick, a Democrat and the head of FERC, said after the approvals that the guidelines would improve the "legal durability" of the panel's decisions on natural gas projects by ensuring they reflect all stakeholder concerns

Oil blasts through $110/barrel, as few alternatives seen to Russian supply. Reuters.
"Oil surged relentlessly beyond $110 a barrel on Wednesday, extending its rally since Russia invaded Ukraine seven days ago, on expectations that the market will remain short of supply for months to come following sanctions on Moscow and a flood of divestment from Russian oil assets by major companies. Relief in the form of more supply is unlikely in the near-term. The Organization of the Petroleum Exporting Countries and allies – which include Russia – stuck to their long-term plan to boost output by just 400,000 barrels per day at a brief meeting on Wednesday."

Trading Economics:
"WTI crude futures slipped from their highest level since 2008 on Thursday in a choppy session that saw the US benchmark dive from an intraday high of $116/barrel to around $110/barrel. The shift in sentiment came amid a report of a deal with Iran that could allow it to export more oil. Iran can reach the maximum oil production capacity in less than one or two months if sanctions are lifted, according to Oil Minister Javad Owji. Earlier today, the US oil benchmark surged more than 5% to $116, a level not since September 2008, on fears of further supply disruptions from Russian sanctions over its invasion of Ukraine. The US took aim on Wednesday at Russia’s oil refining sector with sweeping new export restrictions but has so far fallen short of targeting Russia’s oil and gas exports amid concerns over surging energy prices."

Team Biden's Solution
"Biden calls on country to embrace renewables, while releasing oil reserves to reduce prices. In his first State of the Union address, President Biden called on the country to embrace alternative energy, while promising to release emergency oil reserves to ease the price at the pump following Russia’s invasion of Ukraine. The Interstate Natural Gas Association (INGAA) said the president missed an opportunity to push for expanding gas infrastructure. “Our industry’s ability to support Europe during this crisis is no accident,” INGAA CEO Amy Andryszak said. “It was enabled by American innovation and federal and state policies that supported natural gas infrastructure investment."

So...draining our Strategic Petroleum Reserve (SPR) and releasing $Billions to Iran is all Team Biden can come up with.

Closing Prices:
> Prompt-Month WTI (Apr 22) was down $-2.93 on the day, to settle at $107.67
> Prompt-Month Henry Hub (Apr 22) was down $-0.040 on the day, to settle at $4.722

I heard today that Team Biden will release $11 Billion to Iran for short-term political gain of a few cents per gallon lower gasoline price.
Lots of that money will go to terrorist groups. Way to go Joe!

Total insanity

Maybe he should get a promise for them to stop funding terrorists and chanting Death to America.

Why does he believe they will comply with anything?

The world's despots are taking advantage of us