Energy Prospectus

The Energy Prospectus Group noted that earnings reported by most of the companies they cover were ‘stunningly better’ than a year ago.

Their latest energy sector podcast (issued today) is at the following link: https://youtu.be/HYiBk9Xajmc

Points can be summarized as follows:

For the energy sector “things are looking up” according to EPG
Bullish oil storage report, quite a reversal
OPEC agreement will be extended
5 straight weeks of decline of storage, they expect decline to continue into the second half of the year
IEA oil market report will be issued soon, expect to highlight bullish trends being seen
Gas storage looks much better than a year ago, market more in balance
Natural gas production in U.S. year over year has declined, the market is much tighter
NGL prices are a positive surprise, and will get stronger as we move into the year

The front month NYMEX contract for natural gas is trading at over $3.40/MMBtu this morning. Utility companies see the tightness between supply and demand that is just ahead.

This is "Shoulder Season" for natural gas, when injections to storage are at the high point for the year. Normally gas prices go down this time of year.

Remember that crude oil trades on a global market, but natural gas and NGLs (to a lesser extent) trade on regional markets. The U.S. region is going to be a lot tighter in the 2nd half of this year.