Oil & Gas Prices - April 19

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - April 19

Post by dan_s »

Opening Prices:
> WTI is up 1c to $63.14/Bbl, and Brent is up 5c to $66.82/Bbl.
AEGIS: The Trend remains UP and Buyers are in Control above $61.30. Market Driven hedges are available at current prices. Only a close below $57.60 will change Trend to DOWN and tell us more downside risk is present.

> Natural gas is up 3.6c to $2.716/MMBtu.
AEGIS: The Trend is UP and Buyers are in Control above $2.61. Noisy Spring shoulder trading continues, so price signals are less helpful.

AEGIS notes
Oil

The massive surplus in oil and refined products inventories amassed during the pandemic is nearly gone – IEA
Barely 20% of inventories added last year remain in storage tanks as OPEC and its allies have been able to help keep production offline to deplete inventories
Inventories were 57 MMBbls above their five-year average estimate as of February, down from a 249 MMBbl surplus last July
Global consumption of oil based products is ~95 MMBbls per day and the high demand period is fast approaching

New demand concerns resurface on India COVID-19 outbreak that threatens demand in the world’s third-largest importing country
Less than 100 critical care beds were available in the city of more than 20 million people.
Further, the positivity rate has increased to 30% from 24% the day prior
The country reported 261,500 new cases on Sunday
Certain provinces, cities in India have imposed lockdowns. However, the restrictions fall shy of completely limiting mobility among its population.
If the situation continues to worsen, lockdowns could become more strict

China crude inventories grow, higher prices to deter future builds (Reuters)
China storage levels increased in March as strong imports and domestic production outpaced refinery inputs
Nearly 1.63 MMBbl/d was deposited into storage in contrast with an average of 920 MBbl/d in January and February

Natural Gas

Natural gas prices are higher for the third consecutive day as of Monday morning
The May contract has rebounded from a recent low (April 6) of $2.45 to trade near $2.71 as of April 19
The remaining Summer 2021 strip (May-Oct) has increased by $0.23/MMBtu to $2.83 over the same period
Winter 2021-2022 has also recovered in the past few weeks, up to $0.18/MMBtu to $3.06
AEGIS notes that 2022 has moved much less compared to the front two strips. Price action for 2022 has been mostly sideways for the past 4-5 months. At its current price of $2.70, AEGIS believes Cal 2022 is still undervalued

Strong demand for U.S. LNG this summer is KEY to my forecast that ngas and NGL prices will be much higher YOY in 2021
Robust gas storage demand in Europe has lead to a 74% increase in LNG imports for March (Platts)
Exporters of LNG could have anticipated that European storage requirements would drive demand for gas over the summer and could have sold their cargoes to the region the month before summer delivery began, according to Platts
Reduced gas flows into Europe from Russia via Ukraine is another reason for the European storage depletion year-to-date
So far in April, France, and the Netherlands have already imported more shipments from the US and Russia between them than they did in the whole month of January and February combined
AEGIS notes that this past winter in Europe was colder than average and brought gas inventories to below five-year average levels
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - April 19

Post by dan_s »

On April 14 Reuters reported the IEA predicted global oil demand and supply were set to re-balance in the second half of the year and that producers may then need to pump 2 million barrels per day more to meet the expected demand. OPEC and allies like Russia, a grouping known as OPEC+, would likely prove capable of tailoring its output to demand whether the virus is tamed or not, the IEA added. The IEA released its Monthly Oil Market report for February, and it was generally positive for oil as the IEA increased its global demand forecast for 2021 by 230,000 b/d and reduced its 2021 Non-OPEC oil/NGL growth forecast by 90,000 b/d.

The IEA now expects robust year over year demand growth of 5.7 million b/d in 2021, and now sees global oil demand just 1.3 million b/d below pre-pandemic levels by 4Q 2021. The IEA also said that OECD inventories fell by around 2 million b/d in February and is predicting that oil markets will be tight in 2H 2021 unless OPEC+ adds another 2 million b/d on top of its recent relaxation in cuts. The IEA reported that OECD commercial oil and products inventories fell by 1.8% in February vs. January levels. January's inventories were also revised lower by 1.0%.

On April 16 Reuters reported China's economic recovery quickened sharply in the first quarter to record growth of 18.3% from last year's deep coronavirus slump, propelled by stronger demand at home and abroad and continued government support for smaller firms. But the brisk expansion, heavily skewed by the plunge in activity a year earlier, is expected to moderate later this year as the government turns its attention to reining in financial risks in overheating parts of the economy. The jump in GDP undershot the 19% forecast by economists in a Reuters poll, still the official data showed it was the fastest growth since quarterly records began in 1992 and up from 6.5% in the fourth quarter last year.

On April 16 Reuters reported China's daily crude oil throughput surged 19.7% in March from a year earlier, as refiners ramped up operations to meet robust fuel demand and to build up inventory before shutting down for overhaul. China processed 59.79 million tonnes of crude oil last month, data issued by the National Bureau of Statistics (NBS) showed on Friday. That is equivalent to 14.08 million b/d, easing off 14.13 million b/d averaged in the first two months. The strong year-on-year growth was in part due to a low base a year earlier when Chinese fuel demand was badly hit by coronavirus that forced refineries to slash production. Throughput for the first quarter of this year was 174.04 million tonnes, up 16.5%. "The strong growth is within our expectations. Recovering motor fuel consumption and robust growth in petrochemical demand contributed to the refinery throughput," said Seng Yick Tee, senior director at Beijing-based consultancy SIA Energy. The NBS data also showed China's crude oil output rose 3.3% in March versus the same month a year ago to 17.09 million tonnes, or 4.02 million b/d. Output for the January-March period climbed 1.4% year-on-year at 49.18 million tonnes.

On April 18 Reuters reported Saudi and Iranian officials held direct talks this month in a bid to ease tensions between the two foes, a senior Iranian official and two regional sources said, as Washington works to revive a 2015 nuclear pact with Tehran and end the Yemen war. The April 9 meeting in Iraq, first reported by the Financial Times on Sunday, did not lead to any breakthrough, the Iranian official and one of the regional sources familiar with the matter said. The regional source said the meeting focused on Yemen, where a military coalition led by Saudi Arabia has been battling the Iran-aligned Houthi group since March 2015.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - April 19

Post by dan_s »

Closing Prices:
> WTI prompt month (MAY 21) was up $0.25 on the day, to settle at $63.38/Bbl.
> Also, NG prompt month (MAY 21) was up $0.069 on the day, to settle at $2.749/MMBtu.
Dan Steffens
Energy Prospectus Group
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