Energy Prospectus

Opening Prices:
> WTI is down $3.19 to $74.58/bbl, and Brent is down $3.32 to $79.13/bbl.
> Natural gas is up 3.8c to $2.884/MMBtu.

AEGIS Notes
Oil

Oil falls more than $3 to $74.58 after OPEC delays meeting

The API is forecasting a 9.1 MMBbl inventory build in the US, which would be the ninth consecutive storage build

Israel has approved a four-day ceasefire with Hamas in exchange for the release of hostages

OPEC meeting delayed (BBG)
OPEC has pushed its November 26 meeting to November 30 without giving a reason for the delay
Discussions have run into trouble due to Saudi Arabia’s dissatisfaction with other member's production levels
The market is closely watching moves from OPEC and whether its supply cuts will be extended or deepened in 2024
Oil trader and hedge fund manager Pierre Andurand said, “The Saudis will probably want the other countries to cut as well, so I think it's going to be a negotiation.”

Natural Gas

Natural gas trades higher amid support from weather models turning colder
December ’23 Henry Hub gained 3.6c this morning to trade around $2.882/MMBtu
The Winter ‘23/’24 strip is up 3.4c to $2.923, and the Summer ’24 strip is up by 1.1c to $2.961

Today's Euro Ens forecasts colder temperatures in the Northeast, Midwest, and Southeast, with a temporary cold spell before moderately warming by the week ending 12/8

Lower 48 gas production slowed somewhat on Tuesday to 105.35 Bcf/d from a record 105.80 Bcf/d (S&P)

Egypt is set to resume LNG exports today following a halt since the start of the Israel-Hamas conflict, as gas flows from Israel return to normal

Japan urges LNG buyers to sign long-term deals to bolster energy security (Bloomberg)
Japan's government is pushing LNG importers to secure long-term supply deals to strengthen future energy security
The Ministry of Economy, Trade, and Industry is facilitating meetings between Japanese buyers and foreign suppliers to increase deal-making
The move comes as European and Asian competitors signed several 27-year deals with Qatar in recent months
Without new contracts, Japan's annual long-term LNG supply contracts are projected to decrease by 30% from 2022 levels by 2030

FERC greenlights additional Transco Gas expansion projects in Alabama and Virginia (Criterion)
The FERC approved Transco's Southeast Energy Connector in Alabama and Commonwealth Energy Connector in Virginia
The Southeast Energy Connector, a 150 MMcf/d project, will link gas supplies to Alabama Power's 2 GW Gaston Gas Plant, set to be operational in Q3 2025
The Commonwealth Energy Connector, with a capacity of 105 MMcf/d, will enhance gas delivery in Virginia by expanding Transco CS 168 and doubling its horsepower, expected to be in service by the end of 2025

Note from Keith Kohl at The Energy Investor:
"If there’s one thing we can count on in this world, it’s that the Saudis and Russians
will defend higher oil prices next year. The two extended their voluntary cuts until the
end of the year. But with crude barely hovering above $70 per barrel, my money is on
another extension into 2024.
For that alone, I would put a floor of $80 per barrel next year. Goldman Sachs agrees,
saying that OPEC+ will leverage its pricing power to put crude prices back in a range
between $80-$100 per barrel.
And here’s the important part for us…
Any further pressure causing a dip below $70 per barrel in the short-term would be a
strong buying opportunity for us."

Maybe the Geopolitical Risk to oil supply needs to consider this:
"The U.S. military fired back at Iran-backed militants who injured several troops in Iraq early Tuesday morning local time, according to U.S. officials.
The militants launched a ballistic missile attack from a truck against U.S. forces at al-Asad Airbase in western Iraq, leaving several service members with minor injuries, according to U.S. officials."

"I can confirm an attack last night by Iran backed militias using a close-range ballistic missile against U.S. and coalition forces at al-Assad Airbase in Iraq, which resulted in several non-serious injuries and some minor damage to infrastructure," said Deputy Pentagon Press Secretary Sabrina Singh.

Singh said this was the first time a close-range ballistic missile was used to target U.S. forces since the current spate of attacks against them began in Iraq and Syria on October 17. The militants fired two of these missiles at the base, according to a U.S. official.
According to Singh, the U.S. response was "immediate."

"We can confirm an attack last night by Iran-backed militias using a close-range ballistic missile against us and coalition forces at Al-Asad airbase, which resulted in eight injuries and minor damage to infrastructure. Immediately following the attack, a U.S. military AC-130 aircraft in the area conducted a self defense strike against an Iranian-backed militia vehicle and a number of Iranian-backed militia personnel involved in this attack," said Pentagon Press Secretary Brig. Gen. Pat Ryder.

Guess where those militants got a ballistic missile?

Biden took Yemen of the terrorist list and gave Iran 10 B for haha's and a kickback

Closing Prices:
> Prompt-Month WTI (Jan 24) was down $-0.67 on the day, to settle at $77.10 < Nice rebound this afternoon after being down over $3.00.
> Prompt-Month Henry Hub (Dec 23) was up $0.051 on the day, to settle at $2.897 < Start Praying for a Polar Vortex. Seriously, our gassers are very profitable at this gas price, but I want $3.50 for Christmas.