Oil & Gas Prices - July 25

[dan_s]

Opening Prices:
> WTI is up $1.67 to $96.37/bbl, and Brent is up $1.38 to $104.58/bbl. SEP22 is now the front month NYMEX contract for WTI
> Natural gas is up 18.0c to $8.479/MMBtu.

AEGIS Notes
Oil

EU eases some oil-trading sanctions on Russia
> Russian state-owned companies Rosneft and Gazprom will be permitted to ship oil to third countries under a revision of EU’s sanctions adopted by member states this week with the intention of reducing the dangers to global energy security
> Major trading firms, including Vitol, Glencore, and Trafigura, along with oil majors Shell and Total have stopped trading Russian oil for third parties, citing EU sanctions, including restrictions on shipping insurance. Now, however, they will be able to resume business with Russia under the new provision.

Natural Gas

Gas futures are up by 2.07% this morning, near $8.479
> The gas-weighted cooling degree day total has fallen over the weekend from around 387 CDDs to 373.8 CDDs
> If the 373.8 CDD forecasts hold, it would mark a top-five finish going back to 2000 but would fall short of the top spot
> Lower-48 dry gas production fell to around 97.5 Bcf/d, below the previous year-to-date highs of 97.9 Bcf/d two weeks ago, but pipeline maintenance has knocked supply lower

International gas prices are higher with TTF prices up 3.12% and JKM prices up 2.35%
> U.S. LNG feed gas nominations have declined -0.58 Bcf/d since Friday, which lowered demand to 10.54 Bcf/d
> The drop was attributable to Sabine Pass (-0.68 Bcf/d) and Cameron LNG (-0.12 Bcf/d), while Calcasieu Pass partially offset the slide with a +0.19 Bcf/d gain

U.S. became the world's largest LNG exporter in the first half of 2022
> The United States became the world’s largest LNG exporter during the first half of 2022, according to data from CEDIGAZ. Compared with the second half of 2021, U.S. LNG exports increased by 12% in the first half of 2022, averaging 11.4 Bcf/d
> In June, the United States exported 11% less LNG than the 11.4 Bcf/d average exports during the first five months of 2022, mainly due to an unplanned outage at the Freeport LNG export facility
> Most U.S. LNG exports went to the EU and the UK during the first five months of this year, accounting for 71%, or 8.2 Bcf/d, of the total U.S. LNG exports. Since the end of last year, countries in Europe have increasingly imported more LNG to compensate for lower pipeline imports from Russia and to fill historically low natural gas storage inventories. LNG imports in the EU and UK increased by 63% during the first half of 2022 to an average 14.8 Bcf/d

[dan_s]

Trading Economics:
"US natural gas futures skyrocketed above the $8.80/MMBtu mark, moving closer to a 14-year peak of $9.5/MMBtu hit in early May on prospects of an increasing need for cooling as the weather remains hotter than usual in the United States. Soaring international demand is also adding to the bullish outlook. Russia's Gazprom said it would further reduce flows through the Nord Stream pipeline, delivering only 33 million cubic meters daily from Wednesday, 20% of its capacity, because another turbine will be halted for maintenance. On top of that, the latest EIA's weekly inventory report showed utilities injected just 34 billion cubic feet (bcf) of natural gas into underground storage last week, markedly below median market estimates of a 47 bcf build."

Miss La Nina will take control of U.S. natural gas prices in a few months. Putin will take care of the Eurozone.

[dan_s]

Closing Prices:
> Prompt-Month WTI (Sep 22) was up $2.00 on the day, to settle at $96.70
> Prompt-Month Henry Hub (Aug 22) was up $0.428 on the day, to settle at $8.727

Note that HH gas is still the August contract. My guess is that a lot of shorts got hammered today.