Opening Prices:
> WTI is up $1.19 to $79.97/bbl, and Brent is up $1.02 to $83.94/bbl.
> Natural gas is down -7.0c to $2.595/MMBtu.
AEGIS Notes
Oil
Oil trades above $80/Bbl for the first time since April, with supply tightness in focus
> September ’23 WTI gained $1.17 this morning to trade around $79.95/Bbl
> US GDP rose at a 2.4% annualized rate after a 2% pace in the previous three months, beating analyst expectations for 2Q < No Recession this year!
> Additionally, there’s growing speculation that the Fed is nearing the end of its monetary tightening cycle after the 25-bp rate hike on Wednesday
> Crude has broadly rallied for the past four weeks, buoyed by Saudi and Russian output cuts, and pledges by China to strengthen its economy < If Russia oil exports keep fall, even just a small amount week after week, AND oil demand in China firms up, we should see WTI over $90 by the end of Q3.
Saudi Arabia expected to extend oil production cuts (Bloomberg)
> Out of 22 traders, analysts, and refiners surveyed by Bloomberg, 15 expect Saudi Arabia to prolong its 1 MMBbl/d production reduction into September
> The implemented cuts seem to be effective, with Brent prices rising nearly 12% in the past month to around $83/Bbl
> IEA forecasts a 1.7 MMBbl/d supply deficit for 2H 2023, and the kingdom would want to see a sustained rise toward $90/Bbl and potential improvement in Chinese economic data before unwinding the cuts, according to Tamas Varga from PVM Oil Associates < IMO IEA's forecast is way to conservative. I've now seen three (Raymond James, Goldman Sachs and Eric Nuttall) forecasting supply deficits of more than 2.5 million bpd. As I have posted here many times, IEA's demand forecasts are always too low and they still expect U.S. oil production to get back to pre-pandemic volumes.
Global oil shortage set to expand, forecasts UBS (Bloomberg)
> UBS forecasts a growing oil deficit, expecting an increase from 0.7 MMBbl/d in June to about 2 MMBbl/d in July and August in a July 27 note to clients < The Wall Street Gang is a "herd". The herd will follow the Big Dogs (Goldman Sachs).
> The bank added that even if Saudi ends or halves its voluntary cuts, the September oil deficit would still exceed 1 MMBbl/d
> Crude demand is driven by Asia, notably China and India, with continued strong demand from Brazil and the Middle East
Natural Gas
Natural gas prices continue to slide lower, with the August contract trading at $2.59
> The Winter ‘23/’24 strip is down 3c to $3.56, and the Summer ’24 strip is down 1c to $3.30
> The EIA will release its weekly natural gas storage report today
> The median expectation is for an injection of 14 Bcf, according to the Bloomberg survey < This would be the first bullish storage report in quite awhile.
> The five-year average injection for this week is 32 Bcf
Delfin LNG seeking fifth permit extension from FERC (S&P)
> Delfin secured federal approval in 2017 for its planned offshore LNG export facility to be built off the coast of Louisiana
> The latest request is for a four-year extension for the company to complete onshore facilities, with Delfin guiding toward a final investment decision by October for the first of four floating LNG facilities
> Developers said in the request that the startup of the deepwater port should take about four years
Northeast US set for the hottest day of the year (BBG)
> Forecasts indicate New York City and the Northeast region of the US are set to experience the hottest temperatures of the year so far this week
> Temperatures in the Northeast will reach as high as 99 °F with a feels-like temperature of 106 °F
> Power sector gas demand in the Northeast is expected to rise to 13.8 Bcf/d today, up from a 30-day average of 11.6 Bcf/d
Oil & Gas Prices - July 27
Oil & Gas Prices - July 27
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - July 27
Trading Economics:
"US natural gas futures fell 4% to a 1-week low below $2.6/MMBtu on Thursday, as investors anticipate homes and businesses would use less gas and the weather would be cooler in the next two weeks. Even though the weather is expected to be cooler than expected in the next two weeks, meteorologists predicted that temperatures would still be hotter than usual until at least August 11. Gas exports from the U.S. increased in July, but they were not as high as the record set in April because some facilities needed maintenance. Recently, the amount of gas being sent for export temporarily decreased due to reductions at Cheniere Energy's Sabine Pass plant in Louisiana and the shutdown of the Columbia pipeline to Berkshire Hathaway Energy's Cove Point facility in Maryland. Meanwhile, the EIA reported that utilities added 16 billion cubic feet (bcf) of gas into storage last week, below the forecast but higher than the increase during the same week last year."
"US natural gas futures fell 4% to a 1-week low below $2.6/MMBtu on Thursday, as investors anticipate homes and businesses would use less gas and the weather would be cooler in the next two weeks. Even though the weather is expected to be cooler than expected in the next two weeks, meteorologists predicted that temperatures would still be hotter than usual until at least August 11. Gas exports from the U.S. increased in July, but they were not as high as the record set in April because some facilities needed maintenance. Recently, the amount of gas being sent for export temporarily decreased due to reductions at Cheniere Energy's Sabine Pass plant in Louisiana and the shutdown of the Columbia pipeline to Berkshire Hathaway Energy's Cove Point facility in Maryland. Meanwhile, the EIA reported that utilities added 16 billion cubic feet (bcf) of gas into storage last week, below the forecast but higher than the increase during the same week last year."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - July 27
>Northeast US set for the hottest day of the year (BBG)
> Forecasts indicate New York City and the Northeast region of the US are set to experience the hottest temperatures of the year so far this week
> Temperatures in the Northeast will reach as high as 99 °F with a feels-like temperature of 106 °F
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Temp is 87 in Boston, midday. Don't know where they get this crap. Forecast of 70's this weekend
Every day , I see an article that its hot in Death Valley, Phoenix, etc. Just climate crap propaganda
Aug NG closed down 16 cents to 2.505. Inexplicably, AR is up 3.8 %. The gassers numbers are lousy. Makes no sense. Some of the guys need 3.50 or better to make a lousy 10 % return
CNX had the best numbers so far.
> Forecasts indicate New York City and the Northeast region of the US are set to experience the hottest temperatures of the year so far this week
> Temperatures in the Northeast will reach as high as 99 °F with a feels-like temperature of 106 °F
======================================================================================
Temp is 87 in Boston, midday. Don't know where they get this crap. Forecast of 70's this weekend
Every day , I see an article that its hot in Death Valley, Phoenix, etc. Just climate crap propaganda
Aug NG closed down 16 cents to 2.505. Inexplicably, AR is up 3.8 %. The gassers numbers are lousy. Makes no sense. Some of the guys need 3.50 or better to make a lousy 10 % return
CNX had the best numbers so far.