AEGIS Hedging : February 20, 2024

Oil is trading higher, at $79.80, ahead of the March contract expiration
- The US oil-directed rig count fell by two, from 499 to 497, according to data from Baker Hughes
- Speculators net position in WTI futures increased by almost 7k contracts through last Tuesday, according to CFTC data released Friday
Ship abandoned in Red Sea after Houthi strike (BBG)
- Two anti-ship missiles hit a Belize-flagged commercial vessel, forcing the crew to evacuate
- The European Union formally launched a naval operation yesterday, aiming to protect commercial shipping in the Red Sea
- The US struck several Houthi targets over the weekend, including an underwater vessel
- Continued risks around shipping have forced many cargo and tanker vessels to reroute, disrupting global trade flows
Exxon says they will remain in Guyana despite Venezuelan threats (BBG)
- Exxon’s upstream president said Exxon is “very focused on executing our operations within our defined contract area,” adding, “This development has many years ahead of it, and were not going anywhere”
- Exxon produces about 645 MBbl/d from offshore Guyana
- Venezuela claims a large portion of Guyana’s oil-rich region and has asked foreign oil companies to leave the area

Natural gas prices resume losses as weather forecasts show mild temperatures into March
- March ’24 Henry Hub is down 1.6c this morning to trade around $1.593/MMBtu
- The Summer ’24 strip is down 0.5c to $2.048, and the Winter ‘24/’25 strip is down 2.1c to $3.172
- Today's Euro Ens shows a slight cooling in the Northeast/Midwest, offset by warming in the South Central and Rockies, with a trend towards warmer early March temperatures
- Lower 48 natural gas production fell slightly from Friday, averaging 0.55 Bcf/d lower at 103.91 Bcf/d, with today's low at 103.75 Bcf/d, driven by declines in the Northeast (Criterion)
Energy Transfer advancing with Warrior Natural Gas Pipeline to expand Gulf Coast transport (NGI)
- Energy Transfer remains committed to advancing the Warrior Pipeline, selling about 25% of the 1.5-2.0 Bcf/d capacity, with talks for another 1.6-1.7 Bcf/d
- The 325-mile pipeline, yet to reach FID, from the Permian Basin to the Gulf Coast, aims to connect major hubs and is expected to be in service by late 2026, addressing additional capacity needed in the next two-and-a-half years
- However, DOE's pause on LNG export permits introduces uncertainty for longer-term Gulf Coast projects, including Energy Transfer's Lake Charles LNG, which could receive gas from Warrior

February 20, 2024