Oil & Gas Prices - April 30

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dan_s
Posts: 34463
Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - April 30

Post by dan_s »

Sorry for the late start. I was up half the night with two dogs that aren't fond of thunder.

Opening Prices:
> WTI is down 152c to $63.49/Bbl, and Brent is down 127c to $67.29/Bbl.
> Natural gas is up 2.1c to $2.932/MMBtu.

AEGIS Notes
Crude Oil


Demand optimism mounts as major U.S. cities are moving to full reopen
NYC Mayor Bill de Blasio is moving to reopen the city on July 1
As more cities get closer to fully reopening businesses, demand for fuels and products will heat up.
Further, cruises are expected to reopen in the U.S. in mid-July, according to the CDC

OPEC output increased by 65 MBbl/d in April, according to industry consultant JBC (Bloomberg)
Iran production increased by 100 MBbl/d to 2.5 MMBbl/d
Libyan output fell by 100 MBbl/d to 1.2 MMBbl/d, while Nigerian output fell by 50 MBbl/d to 1.45 MMBbl/d

KPLER says Indian imports could fall by as much as 1 MMBbl/d as the country battles a COVID-19 resurgence
The company said that imports might decline by more than 1 MMBbl/d and possibly even 3 MMBbl/d in the coming weeks. India’s demand loss may knock 200 MBbl/d from global consumption this year
The company noted high storage levels in the country compound the issue

Natural Gas

Natural gas prices are moderately higher Friday morning after sellers overwhelmed buyers on Thursday following the EIA’s storage statistic
The 15 Bcf build in gas inventories surprised analysts who were expecting closer to a 10 Bcf build on average
Yesterday’s selling pressure came as a surprise following the relatively bullish low build in stocks. However, June gas was on a three-day 10c rally, there could have been profit-taking and positioning following the contract roll from May

The EIA reported a 15 Bcf build in US gas storage for the week ended April 23 as cooler weather prompted a net withdrawal from the East region
Last week’s increase in inventories was well below the five-year average build of 67 Bcf, according to the EIA
Storage volumes now stand at 302 Bcf, or 13.87%, less than the year-ago level of 2.2 Tcf and 40 Bcf, or 2.1%, less than the five-year average of 1.938 Tcf
The 15 Bcf rise in stocks was the smallest build in 21 years for the same week in April
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34463
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - April 30

Post by dan_s »

Energy Report: Strained
By Phil Flynn
Commodities (Apr 30, 2021 09:29AM ET)

Oil prices are under strain as reports of a new strain of the Covid 19 virus that was found in India may have made its way into some limited parts of China. The story broke yesterday and it broke oil, yet the market seemed to come back and shrug it off. Now overnight as the story became widely reported, it caused another wave of selling based on fear, not on real demand destruction, at least not yet. The covid fear trade must balance a larger reality that in the near term we will see a major snap back in oil demand. That surge will further dwindle global inventory as OPEC keeps the breaks on production.

Still, traders are worried about a new surge in Iranian output if U.S. sanctions on them are lifted. Iran continues to talk about progress in talks and the U.S. is willing to lift some sanctions so most believe that it will only be a matter of time before Iran is free to flood the market with oil while U.S. shale producers remain sanctioned on federal land from the Biden administration. Hey Joe Biden, lift the sanctions on U.S. oil producers and make it a fair game!

The Biden administration’s anti-oil policies are not sitting well with our Canadian neighbors. Canada is still angry with the unjustified canceling of the Keystone pipelines, which will have no material effect on climate change and now is seemingly supporting Michigan Governors Gretchen Whitmer’s plan to kill another Canadian Pipeline that has operated safely for 60 years. The governor gave an order demanding that Enbridge (NYSE:ENB) shut the pipeline down by May 12. Enbridge will ignore the order as they claim that the governor does not have the authority to tell them to shut it down. But why does the law matter when the climate is concerned?

There is more talk of labor shortages and inflation as a risk to oil prices. A widely reported piece on a shortage of certified gas tank truck drivers is a risk to gasoline prices. Labor shortages are a sign that inflation may not be as transitory as the Fed thinks. Joe Biden’s massive spending proposal that does not focus on work but incentives people not to work is a growing risk to the overall health of the US economy. High taxes on the wealthy and a higher corporate tax will not increase revenue, and it will slow the economy. That will make Biden’s massive spending proposals unsustainable because without the incentive for profit and growth, we will see the economy go from record growth into a major contraction. That will cause pain for many Americans that are going to be forced to become more dependent on the government for their paycheck. Just remember a dollar invested in the private sector returns five dollars. A dollar invested in the government returns 50 cents. You do the math.

Still, in the next few years, the risk for oil is on the upside. The demand surge is most likely coming and Biden’s green policies will only make oil and gas more expensive. Biden’s oil policies are a major tax hike on all Americans and will disproportionally hit the middle class and poor. Maybe they should have thought about that and bought electric cars! Oh, wait, yea too bad, they can’t afford them.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34463
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - April 30

Post by dan_s »

Last Look - WTI posts a weekly gain of $1.44 to settle at $63.58; Prompt-month gas also gained 20c on the week to finish at $2.93

Closing Prices on Friday, April 30
> WTI prompt month (JUN 21) was down $1.43 on the day, to settle at $63.58/Bbl.
> In contrast, NG prompt month (JUN 21) was up $0.020 on the day, to settle at $2.931/MMBtu.

Now that June is the front month for natural gas, traders will be focused on when summer heat will arrive.
Dan Steffens
Energy Prospectus Group
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