Oil & Gas Prices - Mar 29

[dan_s]

Opening Prices:
> WTI is up $0.98 to $74.18/bbl, and Brent is up $0.91 to $79.56/bbl.
> Natural gas is down -6.3c to $1.967/MMBtu. (As of 08:14 AM CDT)

AEGIS Notes with my comments in blue
Oil

Oil rises for a third consecutive day amid Iraqi Kurdistan supply dispute
May ’23 WTI gained 98c this morning to trade around $74.18/Bbl
Iraq’s semi-autonomous northern Kurdistan region halted exporting 400,000 bpd via Turkey since Saturday due to an arbitration ruling needing Iraq's approval for oil shipment < As Matt Iak and I discussed on yesterday's webcast, the global oil market is tight and within a few months demand will exceed supply, so even small supply disruptions will cause oil price spikes.
In addition, easing concerns about a global banking crisis helped to boost risk sentiment in markets
Equities are higher and the U.S. dollar remains relatively unchanged

U.S. urges Iraq and Turkey to resume Kurdish oil exports amid the Iraq-Kurdistan dispute (BBG)
“We’ve urged the governments of Turkey and Iraq to resume the flow of oil through the Iraq-Turkey pipeline,” said U.S. National Security Council spokesman John Kirby on Tuesday < Do they really care what Team Biden wants?
Last week's ruling by the International Chamber of Commerce supported Baghdad's long-standing claim that Turkey shouldn't let the shipment of Kurdish oil from Ceyhan without the consent of Iraq’s federal government
Following the decision, Turkey shut a pipeline running from northern Iraq to Ceyhan
This week, the Kurdish authorities are set to have discussions with Iraq's Federal Ministry of Oil regarding the resumption of oil supply, which can only be done through Iraq's state oil company as per the recent ruling

Natural Gas

Prompt month natural gas contract falls below $2.00/MMBtu
The April natural gas contract expires today, the May contract is trading around $2.12/MMBtu
The Summer ’23 strip is down 6c to $2.44, and the Winter ‘23/’24 strip is lower by 5c to $3.53
Weather forecasts shifted cooler, with the Lower 48 forecast losing 8.7 °F over the two-week forecast period
Early nominations indicate that LNG feedgas flows have reached a new all-time high of 14.24 Bcf/d

Societe Generale pulls out of Rio Grande LNG (Reuters)
The bank disclosed on Tuesday that it had pulled out of the LNG export project planned in Texas
The bank did not comment directly on the decision but did speak on its climate commitments which include ending LNG financing when the project does not conform to its ESG goals
The $11.5 billion project is being developed by NextDecade and will have five liquefaction trains and a capacity of 3.6 Bcf/d, expected to come online in 2026 < The gap between Asia/Europe LNG prices and HH gas prices is over $12/mcf, so these LNG export projects should be extremely profitable. Someone else will step up to take Societe Generale's place.

EU looks to ban Russian LNG imports (Reuters)
On Tuesday EU countries agreed to pursue legal action to stop Russian companies from shipping LNG to Europe
The amount of Russian LNG shipped to Europe increased in 2022, from 564 Bcf to 776 Bcf
The rule would block Russian and Belarusian companies from using regasification infrastructure in EU countries

[dan_s]

Closing Prices:
> Prompt-Month WTI (May 23) was down $-0.23 on the day, to settle at $72.97
> Prompt-Month Henry Hub (Apr 23) was down $-0.039 on the day, to settle at $1.991 < This is a classic example of too many sellers of long NYMEX contracts and not enough buyers since the utilities are out of the futures market. They will be back in a few months.