Oil & Gas Prices - Dec 6

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

Oil & Gas Prices - Dec 6

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Investing.com -- Crude oil futures spiked to their highest in almost three months after reports citing Saudi Arabia's oil minister as saying that the kingdom would continue to over-comply with an agreement to cut production and support world prices.

The so-called OPEC+ group agreed to withhold an aggregate 500,000 barrels a day more from world markets for the three months through March, bringing the total amount of oil withheld to 1.7 million barrels a day. However, reports cited Prince Abdullaziz bin Salman as saying that Saudi Arabia would continue to produce 400,000 b/d below its own agreed output ceiling. UBS analyst Gianni Staunovo said via Twitter this pointed to an absolute Saudi production level of 9.751 million b/d for the period.

U.S. WTI Futures at $59.62 a barrel, vs $58.11 immediately before the comments

Brent futures at $64.75 a barrel vs $63.38.
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Natural gas is down 4.2c to $2.385/MMBtu

From Aegis Energy:
The EIA reported a -19 BCf withdrawal for the week ending November 29, this was less than the -62 Bcf withdrawal in the corresponding week last year
Trading following the report was flat, suggesting that this small withdrawal was already priced in
The next two weeks of withdrawals are forecasted to be much more significant at -77 and -103

Williams’ CEO expects more gas growth from the Northeast region as associated gas alone is not enough to keep up with demand, thus prices need to support gas-directed drilling
Their CEO also doesn’t believe that there should be any steep price spikes due to coal-to-gas switching
AEGIS notes that coal starts to become more prominent in the generation mix around $2.70/MMBtu
The company is also withdrawing capital for the Northeast Supply Enhancement Project due to permitting issues with New York and New Jersey
Dan Steffens
Energy Prospectus Group
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