Energy Prospectus

Opening Prices:
> WTI is up $0.13 to $73.80/bbl, and Brent is up $0.19 to $78.88/bbl.
> Natural gas is down -12.3c to $3.597/MMBtu.

AEGIS Notes
Oil

Oil heads for a weekly loss as demand concerns persist
Feb ’23 WTI lost nearly $6.50 this week to trade around $74/Bbl
A relatively stronger U.S. Dollar and weaker economic outlook continue to weigh on crude prices
A stronger dollar (DXY Index) can cause foreign buyers of dollar-denominated commodities to pay less for the same amount of goods
Furthermore, James Bullard, president of the St Louis Fed, said on Thursday that the central bank's policy rate is not yet restrictive, indicating that he sees rate hikes get closer to a high enough level to bring down inflation in '23

Ongoing concerns about how smoothly China will reopen and whether the country can sustain the eased restrictions persist
Covid spike in China, the largest importer of crude, dampens near-term oil demand, but AEGIS notes that demand would see an uptick after the initial Covid waves

Additionally, Saudi Arabia reduced the price of crude sold to Asia and Europe in February, indicating concerns about the near-term outlook

China expects a significant uptick in travel over the Lunar New Year, which takes place from January 21 to 27, as the country abandons COVID-19 regulations (Reuters)
During the holiday, authorities estimate 2.1 billion passenger trips by air, boat, and land, more than double the 1.05 billion trips made in the previous year
The Civil Aviation Administration of China anticipates an average of 11,000 flights each day which is around 75% of the pre-COVID-19 level in 2019
However, a Covid surge continues to threaten the nation, and how China responds to the probable rise in virus cases that will accompany the reopening will be key

Natural Gas

Natural gas prices are down slightly to $3.69, as the prompt contract is set for its fourth consecutive weekly decline
The Summer ’23 strip is down 11c to $3.51, and the Winter ‘23/’24 strip is lower by 9c to $4.37
Weather forecasts have shifted materially warmer, with the Lower 48 forecast gaining 22.6 °F in the 1-15 day period
The Northeast region’s forecast has gained 32.3 °F, and the Midwest’s forecast has gained 38.9 °F over the same period
Yesterday the EIA reported the largest storage withdrawal of the season so far, at -221 Bcf
This withdrawal was more than 100 Bcf larger than the five-year average and larger than market participants surveyed by Bloomberg expected

Consulting firm says Freeport LNG restart could be months away (BBG)
A new report from Rapidan Energy says that regulators are requiring personnel at the facility to undergo “extensive personal training” before the 2.1 Bcf/d export plant can restart
The report says that the restart is unlikely to occur before the second quarter of 2023 given that “Training is a time-intensive process, and regulators will demand a high standard before allowing Freeport to resume operations”
Freeport LNG continues to guide towards a restart in the second half of January, however, the restart has been delayed several times since August

Trinity Gas Storage closes financing
According to a press release by the company, Trinity Gas Storage is advancing the development of its greenfield natural gas storage facility located in East Texas
The facility will be the first greenfield gas storage site constructed in Texas in more than a decade and will have an initial capacity of 24 Bcf and a total capacity of about 50 Bcf
The facility is expected to begin operations in the second quarter of 2024

OPEC Production Rises as Nigeria Comes Back. Rebounding Nigerian oil production lifted OPEC’s collective crude output in December, with the oil group adding 120,000 b/d compared to November figures and coming in at 29 million b/d, some 800,000 b/d below its production quota.

Colonial Shuts Key Product Lifeline to East Coast. Colonial Pipeline shut one of its lines after a product spill at a Virginia delivery station, halting 885,000 b/d of gasoline and distillate deliveries from Greensboro, NC to Linden, NJ, with a tentative restart set for 7 January.
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OPEC really can't produce up to quotas AND Russian oil exports are on decline.

Consulting firm says Freeport LNG restart could be months away (BBG)
A new report from Rapidan Energy says that regulators are requiring personnel at the facility to undergo “extensive personal training” before the 2.1 Bcf/d export plant can restart
The report says that the restart is unlikely to occur before the second quarter of 2023 given that “Training is a time-intensive process, and regulators will demand a high standard before allowing Freeport to resume operations”!!!!!!

Energy Secretary should at the same time be required to attend Oil & Gas Energy 101 Classes! Piffle! Maybe Biden can come up with an app for it.

OMG!

And sensitivity training too plus 10 % to the big guy. Just pay the bribe

The "Theory" that Team Biden has been "slow walking" the Freeport start-up has now been confirm!

If I was on the Freepost BOD, I would be recommending they get a major law firm and sue the White House. These delays are costing Freeport a ton of money.

Closing Prices:
> Prompt-Month WTI (Feb 23) was up $0.10 on the day, to settle at $73.77
> Prompt-Month Henry Hub (Feb 23) was down $-0.010 on the day, to settle at $3.710 < We need some winter weather to return to the eastern U.S. and we need Freeport LNG to get back on track.