Energy Prospectus

Opening Prices:
> WTI is up $5.93 to $125.33/bbl, and Brent is up $6.53 to $129.74/bbl.
> Natural gas is down -26.1c to $4.572/MMBtu.

If it time for Old Joe to yell "Drill Baby Drill!"

AEGIS Notes
Oil

WTI futures extended gains to $126/Bbl as President Biden plans to ban Russian oil
> Shell announced it will stop buying Russian crude and will phase out its other trading and business dealings (WSJ)
> The surge in oil prices has helped lift average gasoline prices in the U.S. to a record (AAA)

U.S. lawmakers announced the outline of bipartisan legislation to bar Russian oil imports into the U.S. (Bloomberg)
> European Union governments are not so inclined to ban Russian energy as their reliance on Russia is greater
> TotalEnergies SE became the first big oil company to say its traders will no longer buy Russian crude
MY TAKE: Without oil & gas from Russia, Europe's economy will be crushed.

Shell said it will cease buying Russian oil on the spot market and will not renew its term contracts unless directed by governments to do so
> The company warned that removing Russian volumes will lead to reduced throughput at some of its refineries

Natural Gas

Russia says it may cut gas supplies if the oil ban goes ahead
> Deputy Prime Minister Alexander Novak said a rejection of Russian oil would lead to catastrophic consequences for the global market, saying prices could hit $300/bbl
> The U.S. has been exploring a potential ban with allies as a way of punishing Russia, but Germany and the Netherlands rejected the plan on Monday
> The EU gets about 40% of its gas and 30% of its oil from Russia and has no easy substitutes if supplies are disrupted

The prompt-month (Apr ’22) Henry Hub contract is down by 26.1c, near $4.572
> Lower-48 dry gas production is down by about 0.95 Bcf/d this morning, near 93 Bcf/d
> LNG feedgas demand is at 12.2 Bcf/d, with the 1 Bcf/d fall at Corpus Christi LNG responsible for the losses. In addition, Calcasieu Pass set a new all-time record of 600 MMcf/d
> Weather forecasts worsened with the March gas-weighted heating degree day forecast losing 21 HDDs to 551 HDDs

Biden can make oil go down 20 or more if he just says I made a mistake with Keystone and will now allow them to finish it.

Bill: I agree with your comment above, which is why I am being cautious in the oil price used in my valuations.

As of today, as I update my stock valuations, I will be using Raymond James WTI oil price forecast as of 2-22-2022 (before Russia invade Ukraine). You can view them on Slide 6 of my March 5th podcast. You can view the podcast directly from our website home page.

If any of you would like to read the full Raymond James oil price forecast dated February 22, 2022, which contains a lot of details on the global oil supply, just send me an email and I will forward it to you: dmsteffens@comcast.net

A Raymond James energy sector analysts will be joining me on my next live Oil & Gas Market update scheduled for March 24th. You must register on our home page to attend this webinar.

Trading Economics:
WTI crude futures jumped almost 7% to $128 per barrel on Tuesday, closing in on its highest level since 2008, after US President Biden announced a ban on the importation of Russian oil, gas and energy into the US as part of economic penalties for Russia’s invasion of Ukraine. Also the UK is to phase out the import of Russian oil and oil products by the end of 2022. The ban would cut America’s annual supply of oil and refined products by 8%, with crude falling 3%. In Britain, the move is seen dragging down overall oil supply by 8% and diesel by 18%. Russia is the world’s third-largest oil producer, accounting for more than 10% of global supply, according to US EIA. Its exports account for 7% of the world market, of which around 60% go to Europe, making the continent more reluctant in joining US and UK. Exxon Mobil Corp., BP PLC and Shell PLC all announced plans to exit Russian operations last week.

I cannot see how Europe will ban imports of Russian oil & gas. It will crush their economy. Russia will just sell oil to China. Lots of Asian countries will buy the Russian oil.

Closing Prices:
> Prompt-Month WTI (Apr 22) was up $4.30 on the day, to settle at $123.70
> Prompt-Month Henry Hub (Apr 22) was down $-0.306 on the day, to settle at $4.527