Energy Prospectus

Notes from Trading Economics:
Oil
> WTI crude futures fell more than 1% to below $86 per barrel on Monday as the easing of Middle East tensions outweighed expectations of tighter global supply. Israel withdrew more troops from Southern Gaza in a likely response to growing international pressure. Israel and Hamas also restarted peace talks in Egypt, easing tensions that ignited the recent rally in oil prices.
> Meanwhile, top crude exporter Saudi Arabia raised official selling prices for all crude grades to Asia in May as global supply tightened.
> In Mexico, a fire struck an offshore platform operated by the country’s national oil company Pemex, killing one contractor and injuring others.
> Elsewhere, stronger-than-expected US jobs data released on Friday bolstered the demand outlook in the world’s top oil consumer, while investors look forward to the latest inflation readings in the US and China this week.

Natural Gas
> US natural gas futures increased to over $1.8/MMBtu due to expectations of higher demand this week and ongoing reductions in gas production.
> Gas prices fell to their lowest levels in over three years earlier this year, prompting drilling companies to cut back on operations, particularly in areas like the Haynesville shale basin. The Haynesville shale saw a decrease in active drilling rigs, with only 34 rigs currently operating, the lowest since August 2020.
> Additionally, electric grids across the US are preparing for a total solar eclipse, which will temporarily reduce solar power generation and increase the need for gas-powered electricity.

Quite the reversal in WTI. Must be that solar eclipse.

https://www.zerohedge.com/markets/heres-what-will-push-oil-above-100bbl

From OilPrice.com

"Fundamentals and geopolitics pushed oil prices to above $90 per barrel last week as more market participants have become bullish on crude.

After sitting on the sidelines in a more risk-off approach for nearly a year, a growing number of financial market participants now believe that oil is a buy, according to Mike Muller, Head of Asia at the world's largest independent oil trader, Vitol.
As Brent oil prices broke above $85 and then $90 per barrel earlier this month, some short-sellers decided to exit their positions, while the fundamentals with current supply issues and expected strong demand, especially in the second half of the year, are driving an increase in the long positions in oil.

"We have a market that is not necessarily tight in the prompt, but given most people's projections for later in the year, most people, most consultants, most experts, most advisers are calling for stock draws later in the year, and that's giving a firm underpinning to the fundamental picture," Vitol's Muller said on Gulf Intelligence's Daily Energy Markets podcast on Sunday."

Read more here: https://oilprice.com/Energy/Energy-General/Bullish-Sentiment-Has-Taken-Hold-of-Oil-Markets.html

$100 oil could also be in sight, experts say.

The market is currently "on firm fundamental footing," Bob McNally, founder of consultancy Rapidan Energy and a former White House adviser, told Bloomberg Television in an interview last week.

"I think $100 oil is entirely real — it just requires a little more risk pricing on the true geopolitical risk."

By Tsvetana Paraskova for Oilprice.com