Energy Prospectus

Opening Prices:
> WTI is down $6.52 to $96.49/bbl, and Brent is down $6.32 to $100.58/bbl.
> Natural gas is down -11.1c to $4.547/MMBtu.

AEGIS Notes
Oil

Oil prices tumbled 7% Tuesday morning as bullish sentiment wanes
> Multiple developments have rattled confidence in the oil markets
> Russia said U.S. sanctions on its nation won’t affect the Iranian nuclear deal
> A resurgence of Covid-19 cases in China and ongoing developments in Ukraine have also clouded oil’s outlook

The oil market is in the midst of a liquidity crunch, opening up prices vulnerable to big swings (Bloomberg)
> Clearing houses have been increasing margins, making it more expensive to trade the same amount of oil
> Open interest has collapsed to the lowest level since 2015
> The gap between bids and offers for WTI was six cents at times on Tuesday; usually, the amount is about half that, according to Bloomberg

Natural Gas

Gas futures are trading lower this morning, with the prompt contract down by 11.1c to about $4.547
> Lower-48 dry gas production is down by around 92 Bcf/d
> Gas-fired power generation is down to around 135 GW vs. 90 GW for coal, as wind-powered generation rose to 74 GW
> Calcasieu Pass is on track to set another record-high of around 740 MMcf/d this morning

China resold several U.S. LNG shipments to Europe at a hefty premium
> Unipec, the trading arm of China’s Sinopec, sold at least three cargoes for delivery through June to ports in Europe
> European gas usually trades at a discount to North Asia prices, but Europe’s plan to ditch Russian gas will require it to boost LNG imports significantly
> The shipments will load at Venture Global’s Calcasieu Pass facility

"Russia said U.S. sanctions on its nation won’t affect the Iranian nuclear deal"

https://www.wionews.com/world/we-have-r ... lks-462611

the 3 Stooges in the White House,

named Biden, Harris, and wink'n-Blinken
drivin' their clown car

(with Psaki as head cheerleader)

They just blinked again

Isn't that nice!

From Flynn today



There was outrage and indignation when it was revealed that Biden administration officials sent a delegation to Venezuela in an attempt to lift sanctions on the rogue regime. Venezuela dictator Nicholas, the guy who was accused by the UN for being responsible for probable crimes against humanity including judicial killings and the systematic use of torture, seemed pleasantly surprised that the Biden administration would show him so much respect. Yet when an administration is as desperate as this one is to alleviate a diesel shortage and hates the U.S. energy industry and its workers so much that it seems to be their only option, unless you look to the dictators in Iran. Of course, why not support your local dictator if you can.

Yet there was moral outrage across the free world and by both Democrats and Republicans in Congress which made trying to prop up the Maduro Regime a little unseemly. Yet with the Biden administration, where there is a will there is a way. Reuters reported that the U.S. is near to a deal that will allow Venezuelan “oil for debt” swaps by Chevron, ENI, Respol with further actions by Venezuela.

That by no means says that they are giving up on the Iran nuclear deal. They just love Iranian oil

If we are stupid enough to give Iran a clear path to weapons grade uranium, we can kiss goodby what little leverage we have with Saudi Arabia.

My faith in Washington DC is at a new low.

MY TAKE on oil prices: As long as U.S. and OECD petroleum inventories keep falling or just stay at the dangerously low levels they are today, the risk for oil prices is to the upside. We are at the end of the low demand period for oil-based products. Oil demand is seasonal and by the end of April, the demand for black oil will have increased by 1.5 to 2.0 million barrels per day from where it is today.
The worldwide shortage of diesel is a REALY BIG DEAL.

Refiners have a lot of work to do just get distillate inventories back to normal. By the end of April, we need to see refinery utilization rates near 95%.

Closing Prices:
> Prompt-Month Henry Hub (Apr 22) was down $-0.090 on the day, to settle at $4.568
> Prompt-Month WTI (Apr 22) was down $-6.57 on the day, to settle at $96.44 < This speculative traders covering their longs which the bought on margin.

The global oil market is still under-supplied and OECD Petroleum Inventories are still falling.