Energy Prospectus

Opening Prices:
> WTI is down $0.30 to $90.47/bbl, and Brent is down $0.50 to $96.22/bbl.
> Natural gas is up 52.8c to $9.864/MMBtu.

Read the profile on Ovintiv (OVV) that we sent out this morning. They produce a lot of natural gas and NGLs.

AEGIS Notes
Oil

Oil prices see little change from last week and is trading near $90 < Down to $87 at the time of this post. As I have posted here many times, I believe the paper traders set their stop loss orders very tight each weekend. Therefore a few large sell orders in the morning can trigger a lot of computer generated sell orders to feed the selloffs on Monday.
> The market may be weighing the possibility of the Iran nuclear deal being resumed
MY TAKE: No matter what happens with Iran, this world has an energy shortage and there is no quick fix.

As the U.S. considers a response to Tehran's stance on the most recent proposal, President Biden spoke with fellow Western leaders of France, Germany, and the UK in an effort to revive a deal with Iran (BBG)
> The four leaders spoke about "ongoing negotiations" toward a deal and "the need to strengthen support for partners in the Middle East region", according to a US summary of the conversation
> Iran's foreign ministry said today that it has not yet heard from the U.S. or the EU regarding the strategy to save the agreement

A pipeline system carrying oil from Kazakhstan via Russia has been damaged, posing a new threat to Europe's energy supplies
> Caspian Pipeline Consortium (CPC) has halted oil loading from two of the three single mooring points (SPM) at its Black Sea terminal for inspections
> CPC is expected to load 1.28 MMBbl/d in August but the operator did not disclose the precise number of barrels lost due to the disruption

Natural Gas

Natural gas prices are up 6.4%, trading around $9.864
> Gas prices are at the highest level they have been all year < Today we see the highest U.S. natural gas price since June, 2008 when it peaked to $13.36. I now believe we may see a new 25 year high of more than $15 this winter.
> Weather forecasts for the next two weeks have cooled, with average temperatures expected to be equal to or lower than the 10-year normal weather
> Demand for natural gas is expected to average 65 Bcf/d over the next two weeks, while demand in July ranged from 70-75 Bcf/d

Tellurian closes acquisition in Haynesville Basin (Offshore Energy)
> LNG developer Tellurian has closed on a deal to acquire assets in the Haynesville Basin as it develops a portfolio of natural gas production, LNG marketing and trading, and infrastructure that includes Driftwood LNG and an associated pipeline
> The Driftwood LNG export facility is expected to have a capacity of 3.96 Bcf/d
> With the closing of the acquisition, Tellurian has current production of approximately 0.15 Bcf/d from assets in the Haynesville basin. In addition, Tellurian operates 11 wells currently being drilled or completed

Oil steady as tight market competes with recession fears. Reuters.
Oil prices were largely steady on Monday as a relatively tight global supply picture competed with fears of a recession and a rising dollar. Brent crude futures for October settlement fell 34 cents, or 0.3%, to $96.38 a barrel by 1105 GMT. Supply worldwide remains relatively tight, with the operator of a pipeline supplying about 1% of global oil via Russia saying it will reduce output again because of damaged equipment. Meanwhile, the dollar index rose to a five-week high on Monday. A stronger U.S. currency is generally bearish for the market because much of the world's oil trade is conducted in dollars. Investors will also be paying close attention to comments by Fed Chair Jerome Powell when he addresses an annual global central banking conference in Jackson Hole, Wyoming, on Friday.

There is a lot of "noise" out there.

Closing Prices:
> Prompt-Month WTI (Sep 22) was down $-0.54 on the day, to settle at $90.23
> Prompt-Month Henry Hub (Sep 22) was up $0.344 on the day, to settle at $9.680 < A 14-year high in August!

MY TAKE: The "noise" in the global oil market is extremely confusing for the "Paper Traders". My opinion is that FEAR of the FED, FEAR of more oil from Iran, confusion over what's going on in Ukraine are combining for not much impact on the tightness of the physical market. The SPR draws will end soon just because they have too; it is not an endless inventory and the heating oil shortage is a very big deal. Even if more oil comes out of Iran it won't ramp up quickly. The U.S. natural gas market is clearly under-supplied and winters coming soon.

https://www.zerohedge.com/energy/oil-sp ... c-strategy

Saudi prince is not a happy camper.