Oil & Gas Prices - Aug 3

[dan_s]

Opening Prices
> WTI is up $1.10 to $80.59/bbl, and Brent is up $0.98 to $84.18/bbl.
> Natural gas is up 5.8c to $2.535/MMBtu.

AEGIS Notes
Oil

Oil spikes as Saudi Arabia extends its million-barrel output cut,, may go deeper
September ’23 WTI gained $1.18 this morning to trade around $80.67/Bbl

Saudi Arabia will extend its voluntary cut of 1 MMBbl/d through September, according to a state-run Saudi press agency
According to a source from the Ministry of Energy, the cut can be “extended or extended and deepened” < MY TAKE is that Saudi Arabia is going to show the world that they control oil prices and they want to see Brent over $90/bbl.

Furthermore, Russia announced to cut 0.3 MMBbl/d of exports in September

Fitch downgraded the main U.S. credit rating on Wednesday, reflecting a projected fiscal decline and escalating government debt
Crude prices fell toward $79/Bbl yesterday following a spike in treasury yields and the strong dollar weighing on commodities and equities
Additionally, U.S. crude inventories saw a record draw of 17 MMBbl last week, indicating a significant tightening of supply

Russian oil continues to defy G-7 sanctions (Bloomberg)
Several of Russia's refined oil products, including naphtha and fuel oil, are trading above the price caps established by the G7 nations
Two price caps were established in February for Russian refined fuels - $100/Bbl for high-value products and $45 for lower ones
Despite the caps, naphtha and fuel oil are trading above the lower limit, while diesel surpasses the higher one, according to Argus
Meanwhile, gasoil and gasoline prices are nearing the respective cap limits amid a global surge in fuel value

Natural Gas

Natural gas prices are trading higher after falling 8c yesterday to a multi-week low
Weather forecasts shifted warmer, with the most notable change in the Northeast region, which saw an 11 °F hotter shift in the two-week forecast
The share of the thermal power mix that natural gas has occupied has steadily fallen over the last week, from 70.2% to 68.7%, as coal generation has slightly increased

TC Energy looks to complete Coastal GasLink by year-end (Reuters)
The 416-mile pipeline will ship 2 Bcf/d of gas from the border of British Columbia and Alberta to the west coast of Canada to feed the LNG Canada facility currently under construction
The company said the project is now 91% complete and on track for mechanical completion by the end of 2023
The pipeline was first proposed in 2012 and expected to have a final all-in cost of more than twice what was originally planned due to delays

Chesapeake Energy expects service costs to continue to decline (Reuters)
On Wednesday, Chesapeake said it expects oilfield service costs to continue to fall, decreasing by 5-7% next year
Diamondback Energy said the same this week that they believe prices for oilfield equipment and services will fall in response to lower drilling activity
However, several oilfield service companies have said they expect to keep prices mostly the same and expect an uptick in oilfield activity later this year due to higher oil and gas prices

[dan_s]

AEGIS Last Look - Oil finishes $2.06 higher as Saudi extends output cuts to September | Gas snaps a three-day losing streak

Closing Prices:
> Prompt-Month WTI (Sep 23) was up $2.06 on the day, to settle at $81.55
> Prompt-Month Henry Hub (Sep 23) was up $0.088 on the day, to settle at $2.565