Energy Prospectus

Opening Prices:
> WTI is down $0.08 to $94.81/bbl, and Brent is up $0.41 to $101.63/bbl.
> Natural gas is down -5.0c to $9.28/MMBtu.
Both went positive soon after the markets opened.

AEGIS Notes
Oil

U.S. confirms it has sent a response to the E.U. on its proposal to salvage the Iran nuclear deal (BBG)
> Ned Price, a spokesman for the U.S. State Department, confirmed the U.S. response, and the Iranian foreign ministry's spokesman said that "the careful review of the response has started in Tehran"
> However, National Security Council spokesperson John Kirby stated that while a deal is closer than ever, "Gaps remain. We're not there yet"

OPEC's united front on potential action got stronger as more countries agreed with Saudi Arabia's view that production restraints might be required to stabilize the international oil markets (BBG, WSJ)
> Yesterday, Iraq, Algeria, Kuwait, Equatorial Guinea, and Venezuela made statements supporting market intervention, along with backing from Libya and Congo < MY TAKE is that these cartel members can't produce up to their current quotas anyway.
> OPEC's president is the most recent to support Saudi Arabia's suggestion that the group might pump less oil due to market volatility. He added that the proposal was "in line with our views and objectives."
> OPEC+ is scheduled to meet on September 5 and discuss future output

Natural Gas

The EIA releases its weekly natural gas storage report today
> The median estimate is for an injection of 60 Bcf, while the Bloomberg survey ranges from 17-65 Bcf
> This compares to a prior week injection of 18 and a five-year average injection of 46 Bcf
> The total amount of working gas in storage is currently 2,519 Bcf, which is 296 Bcf lower than this time last year and 367 Bcf below the five-year average
My Wild Ass Guess is an injection of 35 Bcf

New LNG infrastructure investment to reach $42 billion annually from 2024 (GasWorld)
> Investments into LNG infrastructure are expected to reach $42 billion annually in 2024, representing an increase of $40 billion from 2020
> The new LNG projects are driven mainly by a short-term increase in natural gas demand in Europe and Asia
> Investments sanctioned in 2023 will show a modest increase, nearing $32 billion before spending ramps up to $42 billion in 2024

From MKM Partners

- WTI is trending down 0.3% this morning in thin early trading at $95.10, and Brent is down
0.1% this morning as well.

- Bloomberg is reporting that Libyan Oil Minister Mohamed Oun supported comments made
earlier this week by the Saudi Energy Minister about market distortions. He was quoted as
saying, “unfortunately, the recently observed heightened volatility in the oil market largely as
a result of misleading news and stories about global oil demand and supplies have sent wrong
signals to all market participants.”

- Bloomberg is reporting that profits from making gasoline in Asia have slumped as summer
demand eases, most notably in the U.S. Refining margins in Singapore fell to the lowest level
in 18 months on Wednesday following a four-day drop, before clawing back some losses on
Thursday. However, rising profits from producing diesel is offsetting some of the weakness in
motor fuel for oil refiners.

Leo Mariani, Managing Director at MKM Partners

Trading Economics

WTI crude futures failed to hold onto earlier gains and fell more than 1% to below $94 per barrel, after rising almost 5% in the previous two sessions as investors balance signs of tightening supplies against concerns of a demand-sapping global economic slowdown. To deal with global macroeconomic headwinds, Saudi Arabia flagged potential output cuts by OPEC+ earlier this week, which could, in turn, neutralize any extra oil from Iran if the West removed sanctions on its industry. Tehran said it is reviewing a US response to the EU's "final" text for the revival of the 2015 nuclear deal, which could lead to a surge in oil exports. Elsewhere, oil exports from Russia and Kazakhstan via the Caspian Pipeline Consortium's Black Sea terminal were suspended due to a damaged pipeline. On the demand side, official data showed that the US exported a record amount of crude and refined products last week.

US natural gas futures bottomed around the $9.3/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.

Any ideas on what is driving the price increases for HPK over the last three days?

HPK is not on my Watch List. Please post what you know about the company under the "Picks" tab.

Closing Prices:
> Prompt-Month WTI (Oct 22) was down $-2.37 on the day, to settle at $92.52
> Prompt-Month Henry Hub (Sep 22) was up $0.045 on the day, to settle at $9.375