Oil & Gas Prices - May 4

Oil & Gas Prices - May 4

Postby dan_s » Tue May 04, 2021 9:02 am

Opening Prices:
> WTI is up 86c to $65.35/Bbl, and Brent is up 93c to $68.49/Bbl.
> Natural gas is up 1.4c to $2.980/MMBtu.

Investing.com -- Crude oil prices strengthened Tuesday, surging on optimism that the latest news on reopening in the U.S. and Europe will underpin demand.

By 9:35 AM ET (1435 GMT), U.S. crude futures traded 1.9% higher at $65.68 a barrel, while the international benchmark Brent contract rose 1.9% to $68.86. Both contracts have climbed to levels not seen in over two years.

U.S. Gasoline RBOB Futures were up 2.4% at $2.1519 a gallon.

Helping the tone has been further signs of the developed world reopening their economies as vaccination programs make large inroads into their adult populations.

New York, New Jersey and Connecticut, states that were among the hardest hit by the pandemic, are set to lift most coronavirus-related restrictions on business and social life within two weeks, while Florida lifted all restrictions on Monday.

The European Union has already unveiled plans to relax bans on international travel, while the U.K. is also set to allow international travel from the middle of May.

This is tending to overshadow the health crisis in India as Covid-19 infections and deaths mount in the world’s third-largest oil importer.

“Preliminary data for Indian fuel demand is already available, which shows that gasoline demand fell 6.3% MoM to total 2.14mt, which is the lowest since August,” said analysts at ING, in a note. “Given that it still appears as though Covid-19 in India have not peaked, we expect to see further downside to fuel demand over May.”

Turning to supply, the Organization of Petroleum Exporting Countries pumped an average of 25.27 million barrels a day last month, only 50,000 a day less than in March, according to a Bloomberg survey.

“Given that OPEC+ will start to gradually ease production cuts this month, along with Saudi Arabia gradually easing its additional voluntary cuts, we should see almost 530Mbbls/d of additional supply coming back to the market over May,” ING added.

Of additional interest later in the session will be the U.S. crude oil supply data from the American Petroleum Institute for the week ending April 30.

In corporate news, Saudi Aramco (SE:2222) posted a sharp increase in profit in the first quarter of 2021, although the free cash flow generated by the world’s largest oil company was quite enough to cover its hefty dividend payout.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 25209
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - May 4

Postby dan_s » Tue May 04, 2021 9:09 am

Inflation will push all commodity prices higher

Energy Report: Inflation Nation
By Phil Flynn
May 04, 2021 09:31AM ET

The US and Europe look to re-open air travel on June 21 and increasing distillate demand expectations as the rest of the commodity complex looks undersupplied. Supply chain issues are creeping into sectors across the commodity space as a scarcity of supply suggests that our super-cycle call that we said was coming is here.

From lumber to grains and now potentially oil and products, the commodity charts are off the map. In the U.S. demand is surging and that with the combination of a re-opening play in the UK, is offsetting concerns about demand destruction in India and the worries about the return of supply from Iran. Besides that, Indian Prime Minister Modi is vowing to not shut down the Indian economy despite a lot of outside pressure to do so. Inflation is here in commodities and it is getting impossible to ignore.

What does this mean for gasoline prices? Well, we told you that America voted for higher gasoline prices when they voted for Joe Biden and he is making good on that promise. The summer driving season price jumps are happening as US supply is below average and gasoline demand is getting ready to skyrocket.

AAA reported yesterday that: “At the start of May, the national gasoline price average is $2.90, which is three cents more than a month ago. Pump prices in April saw minimal variability compared to March, which increased 15 cents from start to finish. Stable crude oil prices amid fluctuating demand helped keep the national average price jumps nominal last month.

“While April saw minimal fluctuation, May is likely to see much larger increases alongside demand spikes, especially closer to Memorial Day weekend,” said Jeanette McGee, AAA spokesperson. “Compared to May 2019, US gasoline demand is down only 4% and gasoline prices are on average just two cents more.”

On the week, the national average increased by two cents. Ten states saw averages increase between five and eight cents, but most states saw increases of one to three cents. The pump price changes come amid flux in supply and demand. For the week ending April 23, the Energy Information Administration reported gasoline stocks saw a small 100,000 bbl build to reach the 135 million bbl mark. That is the highest supply rate since the end of February and an 8.3 million bbl surplus compared to the same time two years ago. While supply increased, demand saw a decrease of 3% to 8.87 million b/d.

Media reports surfaced that a shortage of fuel tank truck drivers may impact gasoline availability this summer. Grady Trimble and myself on Fox Business covered this yesterday. As gasoline demand increases, gas stations are working to adjust delivery schedules to keep pace.

However, deliveries may be delayed in a small number of markets this summer causing select stations to see low to no fuel at some pumps for short periods, one or two days. “With road trips expected to be popular this summer, some summer travel destinations, like beaches or mountains, may see some pumps affected. It is important to understand this is not a market-wide impact.

Gasoline can be found at other stations within a market,” said McGee. “The U.S. is not looking at a gasoline supply shortage; there is ample gasoline supply across the country. It is just a matter of more frequent deliveries to stations to meet demand.” In markets where this happened last month, it was contained within a brand/chain at a select number of pumps.

As a rule of thumb in general, AAA recommends that motorists consider filling up when their fuel level hits a quarter of a tank. The nation’s top 10 largest weekly changes: Indiana (+8 cents), Illinois (+8 cents), Washington (+6 cents), Oregon (+6 cents), Alaska (+5 cents), California (+5 cents), Utah (+5 cents), North Carolina (+5 cents), Ohio (−5 cents) and Hawaii (+4 cents). The nation’s top 10 least expensive markets: Mississippi ($2.57), Texas ($2.57), South Carolina ($2.60), Louisiana ($2.60), Alabama ($2.63), Oklahoma ($2.66), Missouri ($2.66), North Carolina ($2.67), Arkansas ($2.67) and Tennessee ($2.69).

And while Grady Trimble of Fox interviewed me at the Hinsdale, Illinois oasis yesterday, we saw the price increase by 6 cents while we were standing there. And that is just the beginning. Top off your tank to save a few bucks.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 25209
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - May 4

Postby dan_s » Tue May 04, 2021 6:28 pm

Closing Prices:
> WTI prompt month (JUN 21) was up $1.20 on the day, to settle at $65.69/Bbl.
> NG prompt month (JUN 21) was up $0.001 on the day, to settle at $2.967/MMBtu.

Watch Video here: https://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 25209
Joined: Fri Apr 23, 2010 8:22 am


Return to The View from Houston

Who is online

Users browsing this forum: No registered users and 8 guests