Oil & Gas Prices - May 3

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

Oil & Gas Prices - May 3

Post by dan_s »

Opening Prices:
> WTI is down 12c to $63.46/Bbl, and Brent is down 24c to $66.52/Bbl.
> Natural gas is down 2.3c to $2.908/MMBtu.

Oil and gas prices moved higher soon after the markets opened.

AEGIS notes
Crude Oil

The U.S. denies any deal with Iran to ease sanctions, return to the nuclear accord
U.S. officials refuted Iran's reports of an impending prisoner swap while pointing out that the two parties still have many negotiations ahead before sanctions are eased
World powers in Vienna are seeking to broker a U.S.-Iranian deal to revive the nuclear accord

Russia increased output in April as OPEC+ lifts supply quota
The country produced around 10.46 MMBbl/d, a 1.9% increase from March levels
Russia is slated to increase production by another 114 MBbl/d from May to July

India Coronavirus cases hit record-high as the country continues to be devastated by a recent surge
"We were near pre-covid level in March, but new restrictions and covid wave-2 has temporarily reduced India's demand equivalent to about 10% of March demand for both personal mobility and industrial goods movement," said A.K. Singh, head of marketing at refiner Bharat Petroleum Corp
Market analysts are expecting India's transportation fuels demand to slump further in May, pressuring crude prices further

Natural Gas

Last month, Transco scheduled maintenance on Leidy from May 1-May 31, 2021, as part of their ongoing Leidy South Expansion project
The Leidy South Project is a proposed expansion of Williams’ existing Pennsylvania energy infrastructure designed to connect robust supplies of natural gas in northern and western Pennsylvania with growing demand centers along the Atlantic Seaboard in time for the 2021-22 winter heating season.
The Leidy expansion project is due online in late 2021 and will add additional takeaway capacity from the region
“Leidy adds 580 MMcf/d of new takeaway capacity from the basin,” Cabot Oil and Gas CEO Dan Dinges said during the company’s Q1 2021 earnings call
The Leidy Hub outage has caused producers to shut in about 1 Bcf/d in NE Pennsylvania

European Parliament has again called for the halt of the Nord Stream 2 gas pipeline project (S&P Global)
On April 29, in a resolution approved with 569 votes in favor, the parliament called on the EU to “reduce its dependence on Russian energy”
The new resolution is in response to Navalny case, military build-up
The EU relies on large volumes of imports of gas from Russia
In 2020, Russia accounted for 48% (156 Bcm) of the EU’s gas imports, according to European Commission data
Last edited by dan_s on Mon May 03, 2021 12:07 pm, edited 1 time in total.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - May 2

Post by dan_s »

Chart of the Day: Oil's Technical Chart Supports Goldman’s Bullish Call
By Investing.com
May 03, 2021 09:35AM ET


Goldman Sachs forecast that Brent oil will hit $80 this year (~$77 for WTI), as the market will find itself shockingly low on supply relative to the surging demand brought about by the restarting economy. In the investment bank's view: “The magnitude of the coming change in the volume of demand—a change which supply cannot match—must not be understated.”

What do the charts tell us: Based on the pattern height, which includes all the current interest in the contract, the implied target for oil is $74. Keep in mind, though, that even if it will, in fact, get there, it won’t do so in a straight line.

Read More: https://www.investing.com/analysis/char ... -200577082
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - May 2

Post by dan_s »

Last week's news impacting oil, gas and NGL prices:

On April 30 Reuters reported crude oil output in the U.S. dropped by over a million b/d in February, falling to the lowest levels since October, 2017, according to a monthly government report on Friday. U.S. oil production dropped 1.197 million b/d in February to 9.862 million b/d, according to a monthly report from the EIA. Production fell in top producing states North Dakota and Texas, as well as in the offshore Gulf of Mexico, the report said. February's data is the first time oil production has dropped below 10 million b/d since January 2018, according to the agency. The output drop came as a freeze in Texas shut in some production, but declines were also seen in other major oil-producing states.

Meanwhile, monthly gross natural gas production in the U.S. Lower 48 states fell by 7.8 Bcf/d, the biggest monthly decline on record, to 94.8 Bcf/d in February, according to data in EIA's 914 production report going back to 2005. That gas output drop in February was due to severe weather that froze gas wells and pipes in Texas and other states in the central United States. It followed production increases during the prior three months. Gross gas output peaked at 107.1 Bcf/d in December 2019. In top gas producing states, output fell 15.4% in Texas to 23.5 Bcf/d in February, the lowest in a month since February 2018, but held steady near a record high of 21.2 Bcf/d in Pennsylvania. Other states that suffered big declines due to the February freeze included Oklahoma (down 16.7%), Arkansas (down 15.6%), Kansas (down 11.2%) and Louisiana (down 10.0%).

On April 29 Bloomberg reported that Indian oil imports may decline by more than 1 million b/d, and possibly more than 3 million b/d, in the coming weeks as surging COVID-19 infections hit demand, according to industry consultant Kpler. The issue is compounded by the fact India has little room to store additional oil.

On April 30 Reuters reported OPEC oil output has risen in April as higher supply from Iran countered involuntary cuts and agreed reductions by other members under a pact with allies, a Reuters survey found, adding to signs of a 2021 recovery in Tehran's exports. The 13-member Organization of the Petroleum Exporting Countries pumped 25.17 million b/d in April, the survey found, up 100,000 b/d from March. Output has risen every month since June 2020 with the exception of February. Iran's exports are rising as talks take place to revive a 2015 nuclear deal which could eventually allow more oil to the market. So far, OPEC and its allies, known as OPEC+, are not concerned and plan their own output boost from May. "The elevated levels that we are seeing from Iran are generally continuing," Daniel Gerber, chief executive of Petro-Logistics, a consultant that tracks oil shipments, told Reuters this month. Hoping for a demand recovery, OPEC+ this week confirmed a plan to ease from May more of the record cuts made in 2020. From May Saudi Arabia will also begin to unwind an extra voluntary cut it made in February, March and April. The extra Saudi cut means OPEC still pumped much less than called for under the OPEC+ deal in April. Compliance with pledged cuts was 123%, the survey found, versus 124% in March. Iran, plus fellow OPEC members Libya and Venezuela, are exempt from making cuts, so changes in their output do not affect the compliance rate.

On April 29 Bloomberg reported that China’s manufacturing PMI fell to 51.1 in April vs. March’s level of 51.9, according to the data from National Bureau of Statistics and the China Federation of Logistics and Purchasing. Additionally, China’s composite PMI, which includes both manufacturing and non-manufacturing, fell to 53.8 in April vs. March’s level of 55.3. < Any readings over 50 indicate an expanding economy.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - May 3

Post by dan_s »

While many oil-producing regions in the U.S. have enjoyed an incredible boom over the last 13 years, Alaska’s oil industry has been struggling.

Now, we know that The Last Frontier's oil output has seen an irreversible decline since production peaked in the late 1980s. However, the latest news out of the EIA is that Alaska’s output hit a 40-year low in 2020. In fact, production there has declined 28 out of the last 32 years.

Although most investors simply shrug off this production crisis, few realize that Alaska’s output cannot decline much further without dire consequences. Right now it’s dangerously close to the minimum output necessary to keep the Trans-Alaska Pipeline System (TAPS) operating.

Remember, approximately 97% of Alaskan crude must travel through the TAPS in order to reach the market — just imagine the fallout if it were forced to shut down.
Dan Steffens
Energy Prospectus Group
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