Oil & Gas Prices - Aug 15

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dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - Aug 15

Post by dan_s »

Opening Prices (The Year of "The Roller Coaster Ride" continues)
> WTI is down $4.98 to $87.11/bbl, and Brent is down $5.18 to $92.97/bbl.
> Natural gas is down -24.5c to $8.523/MMBtu.

AEGIS Notes
Oil

Iran announced that it will inform the EU this evening of its position on its draft text for the finalized nuclear deal
> "Our answer will be given to the EU tonight at 12 midnight...There are three issues that if resolved, we can reach an agreement in the coming days," said Iran’s foreign minister
> The move comes after months of negotiations and could potentially result in the introduction of more Iranian crude into the market
MY TAKE: This is another issue that IMO is more "FEAR Based" than a potential for an over-supplied oil market because (a) Iran has likely been selling a lot of oil despite the sanctions since they have no fear of Biden and (b) draws from US SPR will end soon & EU sanctions against Russian oil will likely offset any additional barrels that Iran can put on the market.

The world’s top oil importer is showing signs of renewed weakness as China's refiners process less crude and apparent consumption declines (BBG)
> China's crude demand dropped by 9.7% (12.16 MMBbl/d) last month compared to -5.65% (13.041 MMBbl/d) in June, reaching its lowest point since March 2020 after the country reopened major cities from COVID lockdowns
> The country's refinery output slipped to 12.53 MMBbl/d in July compared with 13.37 MMBbl/d in June, according to data from the National Bureau of Statistics
> Prolonged outages at large state-run refineries such as Sinopec Shanghai Petrochemical Corp's 0.320 MMBbl/d crude facility and PetroChina Wepec's 0.200 MMBbl/d plant weighed on national production

Natural Gas

Unaffordable LNG prices undermine rapid demand growth forecasts in key Asian markets (IEEFA)
> A new IEEFA report finds that sustained high prices over the past year have eroded the economic case for LNG and hurt LNG sales in key Asian markets
> LNG markets are already seeing a major realignment of demand away from Asia. Should price spikes and volatility continue over the next several years, downward pressures on Asian LNG demand may accelerate, permanently impairing long-term regional demand growth, said Sam Reynolds, author of the report
> LNG sales in Asia through July 2022 have fallen more than 6% compared to last year. In China and India, two of the largest potential LNG growth markets, LNG imports have fallen 20% and 10% year-over-year, respectively
> As a result, numerous forecasting agencies have begun cutting estimates for Asia’s medium-term LNG demand growth

Germany needs to cut gas use by 20% to stave off the winter crisis (EU Observer) < IMO Eastern Europe is totally screwed this winter
> If it fails to reach 20 percent gas savings, the country is at "serious risk" of an energy crunch, Klaus Müller, head of the federal network agency (BNA) and responsible for managing German gas supplies, told the Financial Times
> European Union countries formally adopted the bloc's plan to curb gas use by 15 percent on Friday to save fuel for a winter of uncertain Russian supplies
> Tank operators are required by law to fill up storage to 95 percent by 1 November. Even if all tanks are filled, they will only have enough gas for two and a half months in the case of a Russian gas cutoff and will increase the chance of another gas crunch next winter
> Benchmark gas prices have been pushed to $62/mmbtu, up from $20/mmbtu at the beginning of the year
MY PRAYER: "Please Lord open the eyes of the idiots we have elected to run this Great Country to the FACT that the Paris Climate Accord and the Green New Deal are not going to work. Please bring some common sense to Washington, DC. before we follow in the footsteps of the morons running Europe. Amen!"
Dan Steffens
Energy Prospectus Group
Fraser921
Posts: 2953
Joined: Mon Mar 22, 2021 11:48 am

Re: Oil & Gas Prices - Aug 15

Post by Fraser921 »

I love your prayer!
Protect us from idiots. Amen!
Reverend!
SergioSays
Posts: 99
Joined: Mon Jul 12, 2021 8:59 am

Re: Oil & Gas Prices - Aug 15

Post by SergioSays »

Knock on wood, but the fact that as of mid-August we have no weather formations off of west africa makes me think that the critical Aug/Sep period for major hurricanes will be well below forecast. Statistically once you hit Oct 1, the odds of a major hurricane in the gulf go way down. Should be helpful for our O&G inventories in Q4.
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - Aug 15

Post by dan_s »

Closing Prices:
> Prompt-Month WTI (Sep 22) was down $-2.68 on the day, to settle at $89.41
> Prompt-Month Henry Hub (Sep 22) was down $-0.040 on the day, to settle at $8.728

Big drops in the natural gas price just because the oil price declined at the open are usually good times to buy the "gassers". The global oil market and the U.S. natural gas market are totally separate markets.

IMO the chance of the U.S, Europe and Iran agreeing to a new nuke deal are less than 10%.

Reuters: Iran must abandon 'extraneous' demands in nuclear talks -U.S
1h ago

WASHINGTON (Reuters) -The only way to revive the 2015 Iran nuclear deal is for Tehran to abandon its extraneous demands, the U.S. State Department said on Monday, saying Washington believes everything that can be negotiated already has been.

State Department spokesman Ned Price told a briefing that the United States would provide its response to the European Union's "final" text on reviving the deal in private but gave no timeline. The EU asked for a response on Monday, diplomats said, and Iran has said it will comply.

U.S. President Joe Biden's administration has been trying to resurrect the 2015 agreement, named the Joint Comprehensive Plan of Action (JCPOA), which was abandoned by Biden's predecessor Donald Trump in 2018. Under the deal, Tehran limited its nuclear program in exchange for relief from U.S., EU and U.N. sanctions.

"The only way to achieve a mutual return to compliance with the JCPOA is for Iran to drop further unacceptable demands that go beyond the scope of the JCPOA. We have long called these demands extraneous," Price said.
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IMO Iran is just playing the U.S. They are selling most of their oil anyway because they have no fear of Team Biden. Each day they move closer to weapons grade uranium. History will label this the worst negotiation ever and one of the biggest mistakes to allow a terrorist regime to get nukes.
Dan Steffens
Energy Prospectus Group
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