Energy Prospectus

Opening Prices:
> WTI is up $1.13 to $112.89/bbl, and Brent is up $3.89 to $119.37/bbl.
> Natural gas is up 10.3c to $5.29/MMBtu.

AEGIS Notes
Oil

Oil futures climb ahead of European Union and NATO leaders meeting on Thursday
> White House National Security Advisor Jake Sullivan said that the U.S. and its allies will impose further sanctions on Moscow
> Many EU members are mulling a possible ban on Russian crude imports, though some including Germany have opposed such a move

Prices also found support Wednesday as a key Kazakh-Russian oil pipeline may be forced to reduce shipments via the Caspian Pipeline Consortium's terminal in the Black Sea (Bloomberg)
> As much as 1 MMBbl/d could be removed due to storm damage
> Russian Deputy Prime Minister Alexander Novak said the repairs could take up to two months

Russian oil is still finding a way to buyers (BBG)
> India’s oil refiners took multiple cargoes of Russia’s flagship Urals crude this month.
> Middle Eastern varieties they normally purchase from Abu Dhabi and Iraq were potential supplanted
> China’s private oil processors are still believed to be purchasing their preferred cargoes from the east of Russia, likely at a steep discount

Natural Gas

U.S. gas futures are up this morning, with the prompt contract gaining 10.3c to around $5.29
> Overnight weather forecasts improved with the March gas-weighted heating degree day forecast posting an 8.6 HDD gain to bring the total to 557
> Most of the cold weather forecasts have been focused in the northeast
> Lower-48 dry gas production has held near 93.0 Bcf/d,

Shell cleared to restart Prelude floating LNG site off northwestern Australia
> The facility produces around 0.6 Bcf/d
> In December, the National Offshore Petroleum Safety and Environmental Management Authority ordered the company to set out a plan and fix any problems to prove the facility could operate safely in the event of a power loss before being resuming operations
> The global LNG market is in a supply shortage which will be worsened if sanctions being weighed end up imposed on Russian gas

Closing Prices:
> Prompt-Month WTI (May 22) was up $3.17 on the day, to settle at $114.93
> Prompt-Month Henry Hub (Apr 22) was up $0.045 on the day, to settle at $5.232

US and OECD Petroleum inventories continue to fall. This is a more serious problem than most investors understand. Team Biden is totally clueless, which is a major concern for me.
If the US and Europe are forced to ration diesel it will be a major "wake-up call" for all educated people. Without enough diesel, food shortage will spread.

Brent moved over $121/bbl in after-hours trading

Trading Economics:
"WTI crude futures surged more than 5% to above $114 per barrel on Wednesday after Russia pledged that the storm in the Black Sea damaged one of the world’s biggest oil pipelines, disrupting exports from Russia and Kazakhstan and possibly wiping out 1 million bpd from markets. Prices were already rising after industry data showed the US crude inventories unexpectedly fell last week, highlighting a tight global market reeling from international sanctions against Russian oil exports. The latest data from the EIA Petroleum Status Report showed US crude stocks fell by 2.508 million barrels last week, after a 4.345 million rise in the previous period and defying market expectations for an increase. On top of that, markets remained on edge over the prospect of further sanctions as US President Joe Biden is scheduled to meet with European leaders on Thursday to discuss Russia’s invasion of Ukraine."

Important points.
> US inventories March 18 were not impacted by sanctions on Russia. The sanctions won't impact US inventories until late April.
> US commercial inventories are falling despite draws from our SPR.
> US oil production is down from November 2021

Trading Economics:
"US natural gas futures extended gains to $5.3 per million British thermal units, the highest since November 26th, supported by a double-whammy of colder weather forecasts and record overseas demand. Traders welcomed reports pointing to higher late-winter heating demand at the end of March, contrasting with previous forecasts pointing to comfortable, above-normal temperatures. Meanwhile, European gas prices remain seven times over those in the US, as the region struggles to replace energy imports from Russia, and crude oil has been trading above $110 per barrel putting additional pressure on the energy market. Accordingly, the number of US LNG tankers sailing to Europe reached a record 164 in January and February and the US is already producing LNG near full capacity."

Important points:
> US inventories of natural gas are more than 300 Billion cubic feet BELOW the 5-year average.
> US natural gas production is flat despite high prices < Actually production is actually down ~2 Bcfpd from Q4 to Q2 because of well freeze offs.
> The more ngas we export, the more global demand for ngas will impact the price