Oil & Gas Prices - July 29

[dan_s]

EPG Live Webinar TODAY at 10AM CT

Opening Prices:
> WTI is up $2.14 to $98.56/bbl, and Brent is up $2.36 to $109.50/bbl.
> Natural gas is up 16.5c to $8.299/MMBtu.

AEGIS Notes
Oil

OPEC+ to discuss maintaining oil output at current levels for September during its meeting next week (Reuters)
> Uncertainty exists regarding the extent of OPEC+'s output increase as some sources say that a minor hike for September will be discussed, while other sources say that output will likely remain unchanged
> Several OPEC+ leaders have stated that increasing supply further is not necessary and that the market instead struggles with a lack of refining capacity
> Meanwhile, Russia and Saudi Arabia reaffirmed their commitment to the OPEC+ agreement and a stable oil market
> The two nations, which lead the oil producers' alliance, "are firmly committed to the goal of the OPEC+ agreement on preserving market stability and restoring the balance of supply and demand," according to a statement posted on the Russian government website after the meeting in Riyadh

Citigroup says that the oil market may be beginning to turn bearish (BBG)
< Low oil inventories, high prices, and volatility may be starting to inflect to a more bearish path by the year-end as the world deals with the effects of the Russia-Ukraine conflict, according to a note from Citigroup
> Signs of moderating oil markets are showing up in prices and inventory indicators, said Citi's analysts
> Additionally, they added that while there are bearish concerns like the chance of a recession, there are bullish variables like Russia, Kazakhstan, Iran, Iraq, Libya, and Nigeria, as well as the potential for hurricanes
> The bank forecasts oil inventory builds of 1.5-2.0 MMBbl/d until year-end in its base case scenario as Europe gradually phases out oil imports from Russia and flows redirect to Asia

Natural Gas

The EIA reported a 15 Bcf injection yesterday, which was below the median estimate of 18 Bcf but within the expected range
> This compares to last week's injection of 32 Bcf which also came in below the median estimate
> Total natural gas in storage now stands at 2,416 Bcf which is 293 Bcf lower than last year and 345 Bcf lower than the five-year average
> Weather forecasts for the U.S. have shifted higher indicating a warmer August than initially expected adding to already record heat
> AEGIS notes that continued heat will lead to more consumption, and thereby, less gas going into storage, increasing the likelihood of a winter supply scarcity event

GE Gas Power to advance ‘breakthrough’ clean tech (gasworld)
> The first project, entitled ‘Lifted-flame combustion for high hydrogen reheat gas turbines’, will explore the use of a natural gas and hydrogen mixture to power advanced gas turbines
> GE aims to break the current, materials-limited upper bound efficiency barriers for new gas turbines
> “Our goal of increasing gas turbine combined cycle plant efficiency by five or more percentage points in the next decade will position GE’s technology to help lead the energy transition” commented Jeffrey Goldmeer at GE Gas Power
MY TAKE: If this advanced technology can make natural gas fired power plants "carbon emissions free", it will be BULLISH for natural gas demand going forward. Wind and Solar cannot compete economically with natural gas power plants and they are unreliable.

[dan_s]

Closing Prices:
> Prompt-Month WTI (Sep 22) was up $2.20 on the day, to settle at $98.62
> Prompt-Month Henry Hub (Sep 22) was up $0.095 on the day, to settle at $8.229 < Gas gains 51.7%, $2.81 this month