Oil & Gas Prices - Nov 9

[dan_s]

Opening Prices:
> WTI is up 3c to $81.96/Bbl, and Brent is up 13c to $83.56/Bbl.
> Natural gas is down 17.6c to $5.251/MMBtu.

AEGIS Notes
Oil

Oil prices remained unchanged Tuesday morning as traders await further signals from the White House on whether it will release oil from the Strategic Petroleum Reserve (SPR)
> Energy Secretary Jennifer Granholm said officials will scrutinize the EIA’s Short-Term Energy Outlook due later today
> An announcement on whether to tap the SPR is reportedly due this week. < IMO this will have little to no impact on oil prices or gasoline prices. SPR oil is low quality and won't draw many bids. Team Biden is just grasping at straws.

Saudi Aramco says spare capacity in the oil market will shrink significantly next year as travel rebounds and due to a lack of investment among producers (Bloomberg)
> Surplus capacity is the equivalent of 3-4 MMBbl/d and will drop as demand for jet fuel increases, CEO Amin Nasser said
> ALL of OPEC+ spare capacity will be gone in 6 to 9 months

The U.S. lifted travel restrictions for non-U.S. citizens traveling to America as long as they provide proof of vaccination and a negative COVID test (NPR)
> Yesterday’s relaxing of air travel will open up travel from over 30 countries
> Pent-up demand triggered a major spike in bookings on Monday (Reuters)
> Airline fares will be going much higher

Natural Gas

The prompt-month (Dec ’21) Henry Hub contract is down by 17.6c this morning, near $5.251
> Lower-48 dry gas production is down by around 0.5 Bcf/d this morning, according to Platts
> Feedgas demand at U.S. LNG facilities is around 11.1 Bcf/d, near capacity, given the reduced flows due to repair work at Freeport LNG

Freeport LNG will likely resume full output around November 20 after repairs have been completed
> An incident on October 31 knocked one of the site’s pre-treatment trains offline
> Feedgas demand at the facility has fluctuated between 0.4 Bcf/d and 1.4 Bcf/d, well below its 2 Bcf/d capacity
> Two more LNG export facilities come online in January that will raise total US design capacity to ~12.5 Bcfpd. LNG exports have been exporting more than design capacity for several months.

European gas prices under pressure as Russia signals supply increases
> Russian President Vladimir Putin promised that the country would begin increasing exports to the EU once domestic inventories were full on November 8
> Gazprom PJSC booked some of the pipeline capacity offered at an auction on Monday to flow gas into Slovakia and added some fuel into German storage facilities over the weekend

[dan_s]

Closing Prices:
> WTI prompt month (DEC 21) was up $2.22 on the day, to settle at $84.15/Bbl.
> In contrast, NG prompt month (DEC 21) was down $0.448 on the day, to settle at $4.979/MMBtu.

Mother Nature and Old Man Winter will give natural gas prices a lift during the week of Thanksgiving.
Watch: https://weather.com/news/weather/video/ ... =hp-slot-2