March 1, 2021

March 1, 2021
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  • WTI is up 44c to $61.94/Bbl, and Brent is up 53c to $64.95/Bbl
  • OPEC+ faces pressure to dampen rally by returning output
    • Global inventories are declining at their quickest pace in the last two decades, according to Morgan Stanley. This has translated to price, with crude futures having their best start to a year in over 30 years
    • The cartel is currently curtailing around 7.1 MMBbl/d, or around 7% of global supply, according to Bloomberg
  • Kazakhstan crude production jumps to 10-month high
    • According to Bloomberg, Kazakhstan liquids production was around 1.77 MMBbl/d in February, up 122 MBbl/d from January
    • Kazakhstan’s quota is set at 1.427 MMBbl/d, which will increase by 10 MBbl/d in March. Excluding condensates, the country produced 1.51 MMBbl/d, or around 83 MBbl/d more than its quota
  • The Baker Hughes oil rig count gained four rigs to bring the total rig count to 309
    • Four rigs were added in the Permian basin, while the Eagle Ford and DJ-Niobrara basins remained unchanged
  • The CFTC reported that managed money net positioning has decreased to (+) 386,855 contracts
    • Long positions increased by 419 contracts to a total of 431,756
    • Short positions also increased by 3,456 contracts to a total of 44,901
  • Natural gas is down 2.8c to $2.743/MMBtu
  • A strong natural gas production recovery in the Permian and Texas side of the Haynesville helped the Lower 48 output reach 92.7 Bcf/d on February 26 (Platts)
    • Following the recent freeze-off induced lows, gas has recovered nearly 18 Bcf/d to its highest level since late March 2020 according to S&P analytics
    • The V-shaped recovery and string of moderate weather forecasts have taken the natural gas contract for April from a high of $3.03 on February 17 to now near $2.75
  • Weakness in the front of the curve has also translated into weakness in the Winter 2021/2022 strip
    • Next winter (Nov-Mar) has given up nearly 20c since February 17 to now trade at $3.05
    • AEGIS believes this may be unfounded and the combination of strong fundamentals and amount of gas in storage implies higher Nymex strip pricing

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