Oil & Gas Prices - July 5

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Opening Prices (compared to Monday's closing prices)
> WTI is up $1.52 to $71.31/bbl, and Brent is up $1.55 to $76.20/bbl.
> Natural gas is up 1.5c to $2.724/MMBtu.

AEGIS Notes
Oil

Oil trades higher as concerns about supply cuts counter economic fears
August ’23 WTI gained $1.53 to trade around $71.32/Bbl

Saudi Arabia, the world's biggest crude exporter, on Monday said it would extend its voluntary output cut of 1 MMBbl/d to August
In conjunction, Russia and Algeria committed to reducing their August production and export levels by 0.5 MMBbl/d and 0.02 MMBbl/d, respectively

Eurozone and UK manufacturing contracted faster than expected in May, while China saw minimal factory activity growth
Additionally, the market focuses on the U.S. and European central banks as they are expected to hike interest rates to curb persistently high inflation

Saudi Arabia Vows Market Stability and Commends Russian Production Cuts (Bloomberg)
Saudi Energy Minister Prince Abdulaziz bin Salman vowed to take "any required measures" for market stability at the OPEC international seminar
The minister lauded Russia's pledge for a voluntary 0.5 MMBbl/d oil export reduction in August
Meanwhile, UAE’s Energy Minister Suhail Al Mazrouei endorsed the latest OPEC+ cuts but ruled out additional production cuts in UAE

Kazakhstan's Oil Production Dips Amid Extensive Power Outages (Reuters)
Kazakhstan's oil output dropped from July 2 levels by about a fifth to 1.46 MMBbl/d on July 4 due to widespread power outages
Among the impacted sites, the Kashagan oilfield’s production was halved to 0.175 MMBbl/d, and overall refining volumes plummeted by 46% to 0.147 MMBbl/d < As the global oil market tightened (by 2 million bpd during Q2), unplanned supply disruptions like this will have larger impact on oil prices.

Natural Gas

Natural gas prices are trading higher, around $2.72, close to a three-month high
The Winter ‘23/’24 strip is around $3.58, and the Summer ’24 strip is trading at $3.32

Weather forecasts shifted cooler, mostly in the Southeast and South Central regions, which cooled by 9.9 °F and 18.7 °F, cumulatively over the two-week forecast period < The term "shifted cooler" is relative to three weeks over 100F in Texas. High today s/b "only" 95F.
Weather-driven gas demand is expected to rise slightly over the next two weeks as temperatures increase

Gulfstream LNG granted export permit (Argus)
The Department of Energy has authorized an export permit for the 0.5-Bcf/d facility planned for Louisiana
The project has not yet secured a Final Investment Decision, but the company has said that they plan to begin producing LNG in less than six years
The Department of Energy has been working on addressing a backlog of planned LNG projects that have received an export license but have not yet begun operations
Gulfstream is one of the dozens of proposed, or under construction LNG export projects on the US Gulf Coast, with the majority planned for the state of Louisiana