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- WTI is up $5.67 to $60.52/Bbl, and Brent is up $6.53 to $66.75/Bbl
- The target of any retaliation by Saudi Arabia is critically important to the direction of current situation in the Middle East
- Should SA counter with a precise response on Houthi forces it implies a more contained conflict
- Should the response be targeted at Iran then we are opening a much more serious sovereign vs sovereign warfare
- This would have major implications on stability in Iran, Iraq, SA, UAE, and Yemen in the medium-term
- US DOE and President Trump have pledged releasing from the SPR to balance the oil markets should it be necessary
- AEGIS notes this sounds comforting however these reserves were intended (back in the 70s and 80s) to supply the US in the case of another oil embargo at a time when we used to import a lot of oil.
- In this case, we only import 600-750k Bbls of oil directly from SA, about 2.8% of total demand. In the event that the international markets demand our oil from the gulf to back-fill SA or others exports – we are already close to max capacity for exported Bbls, running at ~3+ MMBbls per day the last few weeks
- Natural gas is up 6.5c to $2.679/MMBtu
- Natural gas is unlikely to have any fundamental forces act upon it due to the recent oil outages in Saudi Arabia
- Prompt month prices are up almost 5.0%, to $2.68, prior to the market open
- Cameron LNG has declared a force majeure for its Train 1 due to mechanical issues
- Each Train represents roughly 0.5 Bcf/d of capacity
- Feed gas flows currently stand at 6.5 Bcf/d
