Energy Prospectus

Opening Prices:
> WTI is up $0.40 to $94.14/bbl, and Brent is up $0.49 to $100.71/bbl. < Larger than normal gap between WTI and Brent.
> Natural gas is up 7.0c to $9.263/MMBtu.

AEGIS Notes
Oil

Oil extends gains by nearly 40c to $94/Bbl
> WTI is currently trading at its highest levels in three weeks
> According to API, 5.6 MMBbl of crude was drawn last week, which would be the second straight draw amid increased crude exports

The main pipeline for transporting crude oil from Kazakhstan to global markets is expected to see significant disruptions for months as two out of three damaged moorings are repaired (BBG)
> Cracks were discovered in the subsea equipment at two moorings at the CPC oil-loading port in the Black Sea
> CPC crude has always been an important source of low-density oil for refineries in Europe, with almost all of it coming from Kazakhstan
> CPC was expected to load 1.4 MMBbl/d in August, and the operator said that the third mooring is running in "intensive mode" and needs to be inspected
The situation in Europe seems to get worse each day.

According to reports, Russia has contacted several Asian nations to talk about potential long-term oil contracts at discounts of up to 30% from the international market price (BBG)
> The move comes at a time when Russia may be considering trying to replace European buyers once the EU's insurance ban on Russian oil goes into force on December 5
> Additionally, the measure might be an effort by Russia to stop talks about a potential ban exemption that would entail Russian crude sold under a global price cap
MY TAKE: The Asian are willing to take as much Russian oil as they can get at a discount since they have no fear of Team Biden.

Natural Gas

Natural gas falls 5% yesterday on the delay of Freeport LNG plant restart (Reuters)
> Freeport LNG said it expects the partial recovery to begin in early to mid-November, not October as originally estimated
> The company said they are expecting to sustain 2 Bcf/d of production by the end of November < This is a much faster ramp up than I expected.
> The average amount of gas flowing to U.S. LNG export plants held at 10.9 Bcf/d so far in August. That compares with a monthly record of 12.9 Bcf/d in March, while the U.S. has a total export capacity of about 13.8 Bcf/d < Europe is in dire straits and must have a steady flow of LNG from the U.S. Firewood is going to get very expensive in Germany. I feel sorry for the forests.

Mountain Valley Pipeline Wins Four-Year Extension from FERC (Bloomberg)
> MVPs federal authorization was due to expire in October of this year but has now been extended through October 2026
> The order stated that “There has been no showing that the environmental effects of the project have changed materially since the commission authorized the project.”
> The project has been supported in congress by Senator Joe Manchin, who demanded the approval of the pipeline in future legislation, in exchange for his support of the Inflation Reduction Act
This is good news for AR, EQT, RRC and CTRA

Trading Economics:

"WTI crude futures were trading around the $94 per barrel mark, close to levels not seen in three weeks, as concerns about tight supplies continued to hang over the market. The API reported that US crude stockpiles declined by 5.632 million barrels last week, much bigger than expectations for a 900,000 barrel drop. On top of that, Saudi Arabia has recently flagged possible supply cuts from OPEC+ to counter a potential demand-sapping global recession. Crude oil is still down about 25% from the June high on growing fears that a global economic slowdown would dampen consumption as major central banks stem demand with aggressive rate hikes to combat inflation. The potential revival of the 2015 nuclear deal that could lead to more Iranian oil exports also added downside risks to oil prices."

"US natural gas futures bottomed around the $9.20/MMBtu mark after Freeport LNG announced that it would delay the restart of its Quintana export plant to November, backtracking previous statements of an October restart. The pushback of the resumption of flows from the export plant to outside the US prevents the earlier withdrawal of natural gas from storage for outbound shipments. Earlier this week, futures topped the $10/MMBtu mark for the first time in over 14 years, supported by expectations of increased demand for US LNG exports amid growing concerns of European shortages. Russia's Gazprom said it would halt flows through the Nord Stream 1 pipeline to Europe for three days of maintenance at the end of August. The main channel between Russia and Europe was already running at 20% capacity, putting pressure on the region as it seeks to refuel ahead of winter to avoid a natural gas shortage."

>The Asian are willing to take as much Russian oil as they can get at a discount since they have no fear of Team Biden.

They are also willing to take the Spr dump by Biden >> Insanity

Biden will use the funds to forgive college loans in a slap in the face to people that paid their own way.

Closing Prices:
> Prompt-Month WTI (Oct 22) was up $1.15 on the day, to settle at $94.89
> Prompt-Month Henry Hub (Sep 22) was up $0.137 on the day, to settle at $9.330