AEGIS Hedging : March 5, 2024

Oil is trading lower after falling more than $1 yesterday
- WTI prompt time spreads posted their largest decline since October, as the front of the curve weakened yesterday
Russian oil processing rises following recovery from drone attack (BBG)
- Earlier in the year, at least six refineries in Russia were targeted by Ukrainian drones, reducing Russia’s refining capacity
- Almost all facilities hit by Ukrainian drone attacks are back online, but refinery throughput is still down by about 4% compared to December levels
- Over the weekend, Russia pledged to cut oil output further, focusing on both oil production and export cuts
UBS says oil demand to peak this decade (BBG)
- In a report, UBS said, “We expect global oil demand to peak at 106 MMBbl/d in 2029 and gradually decline over the course of the 2030s”
- UBS expects this to be driven by a reduction in transportation fuel demand, with oil demand still relatively supported by petrochemical demand

Natural gas prices trade slightly as mild weather counters lower production
- April ’24 Henry Hub is down 1.8c this morning to trade around $1.898/MMBtu
- The Summer ’24 strip is down 0.3c to $2.404, and the Winter ‘24/’25 strip is up 0.1c to $3.468
- Today's Euro Ens forecast confirmed yesterday's warmer trend, with gains in the Midwest/Northeast and slight increases in the Southeast/South Central, while the next two weeks will bring warmer nights and stable daytime highs
- Lower 48 natural gas production rebounded slightly by 0.3 Bcf/d, reaching 100.6 Bcf/d, but fell to 99.74 Bcf/d this morning, the lowest level since August 2023, driven by declines in South Central and Rockies (Criterion)
Two LNG developers secure capacity on NGPL’s Texas-Louisiana expansion (S&P)
- Two LNG developers secure capacity on NGPL’s Texas-Louisiana Expansion, subscribing to the remaining 130,000 Dt/d of firm capacity, indicating heightened demand from Gulf Coast LNG terminals
- Kinder Morgan’s NGPL finalizes agreements with Golden Pass LNG for 80,000 Dt/d and Delfin Midstream for the remaining 50,000 Dt/d, aiming for a July 2026 in-service date for the project
- The expansion project, targeting a July 2026 in-service date, will add 300,000 Dt/d of firm eastbound capacity on NGPL’s Louisiana line, utilizing existing unused capacity on the pipeline to offer a total of 467,000 Dt/d of new firm capacity

March 5, 2024