Energy Prospectus

Opening Prices:
> WTI is down $0.22 to $80.49/bbl, and Brent is down $0.19 to $84.75/bbl.
> Natural gas is up 4.4c to $2.15/MMBtu. (As of 07:42 AM CDT)

AEGIS Notes with my comments in blue
Oil

Oil holds steady above $80/Bbl amid lingering demand concerns
May ’23 WTI lost 22c this morning to trade around $80.49/Bbl < Strong resistance at $81
Crude gained nearly $5, or 6.5%, this week after OPEC+’s surprise 1.66 MMBbl/d production cut

U.S. job openings fell to the lowest since 2021, dampening market sentiment
However, the U.S. Dollar fell to its lowest in more than two months, making oil more affordable for holders of other currencies
Also, the market awaits Friday’s U.S. non-farm payrolls data amid weak economic indicators from China and the US, raising demand fears
Today's EIA Petroleum report should be bullish if it is close to what API reported last night.

Iraq awaits approval from Turkey to restart northern (Kurdish) exports
Iraq and KRG seek to restart northern oil exports amid new export agreement
Following a dispute that halted oil flows from a pipeline in late March, Iraq and the Kurdistan Regional Government (KRG) have reached an agreement to restart northern oil exports
The halted flow of 0.45 MMBbl/d of crude oil from the Fish-Khabur border area to the Ceyhan port was due to Iraq's arbitration win against Turkey
Iraq's state-owned marketing company SOMO and the KRG's Ministry of natural resources will jointly export Iraq's northern oil, pending approval from Turkey

Turkey increases diesel imports from Russia despite EU sanctions (BBG)
Turkey imported a record amount of diesel-type fuel from Russia in March, exceeding 10 MMBbl, the highest in at least seven years, according to Vortexa
EU sanctions in February banned seaborne imports of Russian fuel, leaving Turkey as one of the few legitimate buyers of Russian diesel
Turkey may benefit from Russia's surplus diesel at attractive prices, possibly allowing the country to sell its own diesel at higher rates
However, the impact of recent earthquakes on Turkey's diesel import requirements and refining system's lower levels is still uncertain

Natural Gas

Natural gas prices are trading higher by about 3%, around $2.15
Weather forecasts shifted slightly cooler, although temperatures are still expected to be mostly above normal for the month of April
Weather-driven demand is expected to continue to fall throughout the month as temperatures trend higher

Federal Court rejects pitch to stop Regional Energy Access Pipeline (S&P)
Environmental groups are attempting to stop the construction of the 829-MMcf/d Appalachian pipeline
The project will increase access to natural gas for demand centers in New Jersey and Pennsylvania
The pipeline is expected to come online in the 2023-2024 season, however, Transcontinental has warned that even a slight delay could endanger that timeline

New nuclear reactor in Georgia generates first electricity (S&P)
Vogtle power plant Unit 3 has begun startup procedures, with the new unit expected to enter commercial service in May or June
The new reactor has a capacity of 1,150 MW and was at 25% of its total capacity as of April 3
Vogtle Unit 4, the next reactor to come online, has an expected in-service date of Q42023 or Q12024
The Southeast region consumes a significant amount of natural gas for power generation, some of which will be displaced by the new nuclear reactor

According to AAA, the current national average price for a gallon of regular gasoline is $3.51, up from $3.44 a week ago and $3.39 one month ago. Energy prices overall have soared since President Joe Biden took office, in part because of Russia’s invasion of Ukraine but also because of Biden’s work to discourage domestic oil and gas investment and production.

U.S. gas prices poised to rise as Democrats block domestic energy bill. Heartlander.
International oil producers are planning to cut oil production, meaning gas prices will likely begin rising immediately as Democrats block Republican efforts to increase domestic oil and gas energy production. OPEC+ announced Sunday a cut in oil production to the surprise of many who speculate prices could rise significantly as a result. Last summer, regular gas prices set new records, surpassing $5 per gallon on average. Gas prices are already on the rise this year.

If Raymond James' forecast of $105/bbl WTI by Q4 proves to be accurate, we could see the national average gasoline price get up to $5.00/gallon in a few months. I wonder why we don't see more adds about hybrids. Jim Puplava discussed this with me on my Financial Sense Network interview.

Closing Prices:
> Prompt-Month WTI (May 23) was down $-0.10 on the day, to settle at $80.61
> Prompt-Month Henry Hub (May 23) was up $0.049 on the day, to settle at $2.155

As expected, the $81 resistance level is going to be a hard cap to break thru, but it will happen by the end of Q2 if OECD Petroleum inventories continue to decline.