Opening Prices:
> WTI is up 58c to $84.15/Bbl, and Brent is up 66c to $84.38/Bbl.
> Natural gas is down 10.7c to $5.319/MMBtu.
AEGIS Notes
Oil
The trend is UP. Buyers will remain in control above $83. A weekly close below $79.40 will change the trend. Market-driven hedges are available at current prices.
Oil prices rose Monday morning by about 1%, a week where OPEC and its allies gather to discuss their oil supply policy
> Ahead of Thursday’s OPEC+ meeting, Kuwait’s oil minister said he supports raising output by 400 MBbl/d
> OPEC+’s plan to continue increasing supply by 400 MBbl/d has been challenged by consuming nations who say OPEC needs to supply more oil in the face of tight supplies < MY TAKE: OPEC+ is struggling to make the 400,000 bpd per month increases and as over half of the cartel members are already at capacity. Plus, all of them want and need high oil prices.
President Joe Biden said he was reluctant to describe what he planned to do if oil-producing nations don’t boost output (Bloomberg) < "reluctant to describe" should be changed to "does not have a clue".
> Asked how the U.S. would respond if OPEC governments don’t act, he said, “What we’re considering doing, that I’m reluctant to say before I have to do it.”
> A senior Biden administration official said over the weekend that the U.S. hoped to see production increase in the short term but stands by its longer-term goal of continuing to transition to more reliant on renewable energy sources
China may be forced to start purchasing crude at elevated prices to replenish its declining stockpiles (BBG)
> Commercial and strategic oil inventories have shrunk to the lowest level since November 2018 in terms of filled capacity, according to Kayrros, which tracks supplies at about 190 terminals
> “The level looks as low as it can go, and refiners may start restocking from here,” said Yuntao Liu, an analyst with Energy Aspects in London
Natural Gas
The trend is UP. A change in trend would require a weekly close below $4.80. Sellers have regained control and will remains so below $5.85. Market-Driven hedges for producers are available at current prices.
The prompt-month (Dec ’21) Henry Hub contract is down by 10.7c this morning, near $5.319
> Weather forecasts turned warmer over the weekend, with nearly every region revising temperature forecasts significantly upwards
> The new weather models removed 27 Bcf from the demand forecasts, according to Criterion Research
Feedgas demand at U.S. LNG facilities hit a six-month high of 11.8 Bcf/d on Friday, October 29, as Sabine Pass Train-6 commissioning commences
> The prompt-month JKM (Japan/Korea) contract is trading near $30/MMBtu, while the prompt-month TTF (Europe) contract is down to $22/MMBtu and fell $8 last week
> The export arbitrage remains wide open. However, TTF prices have come under pressure recently, as Russia vowed to increase exports to fill EU gas inventories beginning November 8
Oil & Gas Prices - Nov 1
Oil & Gas Prices - Nov 1
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Nov 1
LONDON (Reuters) -Oil prices rose on Monday as expectations of strong demand and a belief that a key producer group will not turn on the spigots too fast helped reverse initial losses caused by the release of fuel reserves by China, the world's biggest energy consumer.
Brent crude futures rose 70 cents, or 0.8%, to $84.42 a barrel by 1012 GMT, after hitting a session low of $83.03.
U.S. West Texas Intermediate (WTI) crude futures gained 40 cents, or 0.5%, to $83.97, having fallen to $82.74 earlier.
"Fundamentals have not changed, and the oil market will remain tight in the near-term," said Stephen Brennock of oil brokerage PVM Oil.
A Reuters poll showed that oil prices are expected to hold near $80 as the year ends, as tight supplies and higher gas bills encourage a switch to crude for use as a power generation fuel.
Oil rallied to multi-year highs last week, helped by a post-pandemic demand rebound and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sticking to gradual, monthly production increases of 400,000 barrels per day (bpd), despite calls for more oil from major consumers.
OPEC+ is expected by analysts to stick to that number at its Nov. 4 meeting, with members Kuwait and Iraq in recent days voicing their support for it, saying those volumes were adequate.
U.S. President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery as part of a broad effort to pressure OPEC+ to supplies.
Prices rose despite China saying in a rare official statement that it had released gasoline and diesel reserves to increase market supply and support price stability in some regions.
Spurred by rising oil prices, U.S. energy firms added oil and natural gas rigs for a 15th month in a row in October, taking them to the highest since April 2020, energy services firm Baker Hughes Co said on Friday. < All year the U.S. upstream companies have been completing more wells than new-drills, but the DUC inventory is back to normal and all of the "Good DUCs" have been completed. It will take a lot more rigs drilling for oil to keep U.S. oil production growing.
Exxon (NYSE:XOM) and Chevron (NYSE:CVX) are looking to add drilling rigs in the Permian shale basin after sharply cutting crews and output in the region last year, the companies said on Friday.
Brent crude futures rose 70 cents, or 0.8%, to $84.42 a barrel by 1012 GMT, after hitting a session low of $83.03.
U.S. West Texas Intermediate (WTI) crude futures gained 40 cents, or 0.5%, to $83.97, having fallen to $82.74 earlier.
"Fundamentals have not changed, and the oil market will remain tight in the near-term," said Stephen Brennock of oil brokerage PVM Oil.
A Reuters poll showed that oil prices are expected to hold near $80 as the year ends, as tight supplies and higher gas bills encourage a switch to crude for use as a power generation fuel.
Oil rallied to multi-year highs last week, helped by a post-pandemic demand rebound and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sticking to gradual, monthly production increases of 400,000 barrels per day (bpd), despite calls for more oil from major consumers.
OPEC+ is expected by analysts to stick to that number at its Nov. 4 meeting, with members Kuwait and Iraq in recent days voicing their support for it, saying those volumes were adequate.
U.S. President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery as part of a broad effort to pressure OPEC+ to supplies.
Prices rose despite China saying in a rare official statement that it had released gasoline and diesel reserves to increase market supply and support price stability in some regions.
Spurred by rising oil prices, U.S. energy firms added oil and natural gas rigs for a 15th month in a row in October, taking them to the highest since April 2020, energy services firm Baker Hughes Co said on Friday. < All year the U.S. upstream companies have been completing more wells than new-drills, but the DUC inventory is back to normal and all of the "Good DUCs" have been completed. It will take a lot more rigs drilling for oil to keep U.S. oil production growing.
Exxon (NYSE:XOM) and Chevron (NYSE:CVX) are looking to add drilling rigs in the Permian shale basin after sharply cutting crews and output in the region last year, the companies said on Friday.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Nov 1
Closing Prices:
> WTI prompt month (DEC 21) was up $0.48 on the day, to settle at $84.05/Bbl.
> In contrast, NG prompt month (DEC 21) was down $0.240 on the day, to settle at $5.186/MMBtu.
All of my forecast/valuation models are using the following oil & gas prices, adjusted for regional differentials and each company's hedges.
Q4 2021: $75/bbl of oil and $5.00/mcf of ngas
YR 2022: $80/bbl of oil and $4.25/mcf of ngas
> WTI prompt month (DEC 21) was up $0.48 on the day, to settle at $84.05/Bbl.
> In contrast, NG prompt month (DEC 21) was down $0.240 on the day, to settle at $5.186/MMBtu.
All of my forecast/valuation models are using the following oil & gas prices, adjusted for regional differentials and each company's hedges.
Q4 2021: $75/bbl of oil and $5.00/mcf of ngas
YR 2022: $80/bbl of oil and $4.25/mcf of ngas
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Nov 1
Joe Bastardi's weather forecast for last week of November and first half of December is very bullish for natural gas price.
Watch his Saturday Summary: https://www.weatherbell.com/premium/
Why? If we get a cold start to winter it creates doubt among the utilities that they can make it through a cold winter. That turns into a bidding war for supply and pushes the Q1 NYMEX ngas futures contracts higher. Plus, the US has two more large LNG export facilities coming online in January.
European ngas prices have come down, but the profit margin on LNG cargos is still HUGE.
Watch his Saturday Summary: https://www.weatherbell.com/premium/
Why? If we get a cold start to winter it creates doubt among the utilities that they can make it through a cold winter. That turns into a bidding war for supply and pushes the Q1 NYMEX ngas futures contracts higher. Plus, the US has two more large LNG export facilities coming online in January.
European ngas prices have come down, but the profit margin on LNG cargos is still HUGE.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group