Energy Prospectus

Opening Prices
> WTI is up $0.04 to $77.21/bbl, and Brent is up $0.14 to $81.57/bbl.
> Natural gas is up 12.8c to $3.161/MMBtu.

AEGIS NOTES
Oil

Oil is trading higher, around $77.60, extending gains from Friday
The 2024 Calendar strip is at $75.28, and the Cal ’25 strip is trading around $71.35

Goldman Sachs lowered their 2024 Brent forecast from $98/Bbl to $92/Bbl, despite reaffirming their view that they expect “ongoing resilience” in oil demand and a recovery in price

OPEC calls out negative sentiment in oil market (BBG)
OPEC said in their latest monthly report that “recent data confirms robust global growth trends and healthy oil market fundamentals”
The analysis follows last week’s statement by the Saudi Energy Minister that the recent selloff in oil is driven by speculative positioning

OPEC’s data shows that oil inventories are on track to fall at a record pace of 3 MMBbl/d this quarter Trust OPEC, not IEA, which has turned too political (wanting to please their BOSS)

The report noted that Iraq has been producing more than its production quota, with the country producing 4.33 MMBbl/d in October
Iraq and Kurdistan continue discussion to resume oil exports through Turkey (BBG)
Iraq and the Kurdistan Regional Government are looking to resume oil exports through the 500 MBbl/d Iraq-Turkey pipeline
The pipeline was shut in March following a dispute between Iraq and Turkey over export payments and Turkey’s claim that the pipeline was damaged by earthquakes in February

Natural Gas

Gas extends gains as overnight weather forecasts came in bullish < IT IS ALL ABOUT THE WEATHER IN NOVEMBER
Dec ’23 Henry Hub gained 12.8c this morning to trade around $3.161/MMBtu
The Winter ‘23/’24 strip is up 12c to $3.263, and the Summer ’24 strip is up by 5.9c to $3.246

Prompt month Henry hub lost 48c last week amid bearish weather forecasts and record-high production
Today’s weather forecast indicates a -12-degree temperature drop in the Lower 48, with sharper declines of -23 and -25 degrees in the Northeast and Midwest in the 11-15 day period
Lower 48 gas production averaged 104.49 Bcf/d over the weekend, up by +0.38 Bcf/d from last week, with increases in Appalachian volumes and continued strength in the South Central

Top LNG importer China ramps up resale of LNG cargoes (Reuters)
China, the world's top LNG importer, has re-sold 0.617 Mtpa of LNG in the first nine months of 2023, surpassing 0.576 Mtpa in 2022
Now the world's second-largest LNG re-exporter after Spain, China is trailing Spain's 2022 export of 1.7 Mtpa and 1.15 Mtpa in 2023
The nation aims to capitalize on price arbitrage, supported by its long-term supply deals with Qatar & the US and substantial terminal capacity
South Korea is the primary recipient of China's LNG reloads this year, taking 27% of the total, as China's LNG sales rise amid growing Asian demand and the disruption of Russian LNG exports

Closing Prices
> Prompt-Month WTI (Dec 23) was up $1.09 on the day, to settle at $78.26
> Prompt-Month Henry Hub (Dec 23) was up $0.164 on the day, to settle at $3.197

The Organization of the Petroleum Exporting Countries in a monthly report said the market was healthy despite “exaggerated negative sentiments,” citing strong Chinese imports, minor downside risks to economic growth and a robust physical oil market.

“Recent data confirms robust major global growth trends and healthy oil market fundamentals,” OPEC said in a feature article at the start of its report.

“Oil prices have trended lower in recent weeks, mainly driven by financial market speculators.”

In the report, OPEC nudged up its forecast for world oil demand growth in 2023 to 2.46 million barrels per day (bpd), up 20,000 bpd from the previous forecast. In 2024, OPEC sees demand rising by 2.25 million bpd, unchanged from last month.