Oil & Gas Prices - Nov 21

Oil & Gas Prices - Nov 21

Postby dan_s » Mon Nov 22, 2021 10:05 am

Opening Prices:
> WTI is up 9c to $76.03/Bbl, and Brent is down 4c to $78.85/Bbl.

AEGIS Note : "The 11-week UP-trend has come to an end as WTI settled at $76.10. As it stands, sellers are in control; price action will be watched closely over the week. If oil holds above the $78.50 control throughout the week, it would imply the DOWN-trend is suspect. A weekly close below last week’s low of $75.37 will confirm the DOWN-trend. Risk-driven hedges for Producers are recommended while prices remain at profitable levels."

> Natural gas is down 25.3c to $4.812/MMBtu.

AEGIS Note: "The trend is DOWN. Sellers and buyers are vying for control at $5.05, with sellers trying to take control this morning. Prices were inconclusive last week as most price action occurred near the control level. A weekly close above $5.88 will change the trend. Risk-driven hedges are available at current prices."

My comments are in blue below

Oil:
Oil futures continued to trade near $76/Bbl as the threat of multiple nations tapping their national crude reserves remains
President Biden has been talking about releasing oil from the strategic reserve, and Japan’s TV Asahi reported Monday that Tokyo is preparing to release crude from its national stockpiles as part of a joint effort with the U.S. (Bloomberg)
IMO this is just another foolish move by Team Biden. The SPR is for national security and should NEVER be used for political reasons. It may hold oil prices down in the short-term, but will lead to higher prices next year. Plus, the SPR oil is not high quality and may not get a lot of bids.

Bullish wagers on WTI shrank by the most since July last week
The net-long bets fell more than 10% to 307,059 contracts in the week ended Nov. 16 (CFTC)
A Covid resurgence and the threat of nations tapping SPRs have been pressuring crude lower

U.S. drilling rigs targeting oil rose by seven to 461 last week, according to Baker Hughes
The Permian basin saw the largest increase at +7. Rigs now stand at 278 in the Permian, still about 130 rigs below levels before the pandemic
The number of new wells being completed may be going up, but the number of DUC wells being completed is going down. We are still a long way from the active rig count that increase US oil production on their own.

Natural Gas

The prompt-month (Dec ’21) gas contract is down 25.3c this morning, near $4.812
The selloff has occurred through the remaining tenors in the Winter 21/22 strip, with each contract through Mar ’22 down at least 25c

There was plenty of weather volatility during the weekend runs, though the net impact was largely neutral
The largest changes were in the 6-10 day range as the Northeast and Southeast regions are expected to see much cooler temperatures. These gains were offset by warmer temperatures in the South Central, Rockies, and West regions
The November gas-weighted heating degree day total increased by 2.6 over the weekend to 537.2, while the December 21 forecast lost 20.2 HDDs to 799.6

According to Platts, U.S. dry gas production is up to 94.5 Bcf/d, its highest since January 2020

Feedgas demand at U.S. LNG facilities is near its record-high set on Friday, at 11.99 Bcf/d
Freeport LNG is running near capacity (2 Bc/d) after facing several outages over the last several weeks
Sabine Pass has also been running very high lately as Cheniere continues to introduce feedgas to train 6. The facility is running at 4.38 Bcf/d, which would be a new record-high
The global natural gas and NGL markets are extremely tight. Europe's TTF price is over $31/MMBtu and Japan/Korea is over $37/MMBtu. Demand for US LNG will remain high all winter and if our export facilities remain near capacity (now over 12 Bcf per day), gas in US storage will be drained. December weather is KEY and Old Man Winter is moving into a cold pattern.
Dan Steffens
Energy Prospectus Group
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Re: Oil & Gas Prices - Nov 21

Postby dan_s » Mon Nov 22, 2021 11:32 am

Reuters: Oil stored in industry stocks for OECD countries dropped by 51 million barrels in September and were 250 million barrels below the five-year average and at their lowest since the start of 2015. Preliminary October data pointed to a slight increase. "Global oil demand is strengthening due to robust gasoline consumption and increasing international travel as more countries re-open their borders," the IEA said. "Long the weak link in the demand recovery, a resurgence in jet fuel consumption is at last on the horizon," it said, as countries such as the United States, Australia, Thailand and Singapore lifted international travel curbs. But IEA said an uptick in coronavirus cases in Europe, weaker industrial activity and higher oil prices could dent demand. The IEA kept its outlook for oil demand growth largely steady at 5.5 million barrels per day for 2021 and 3.4 million b/d next year.

If oil demand increases by 3.4 million bpd in 2022 this world will need every drop of OPEC+ that is now being held back. More than half of the OPEC+ countries are already producing at maximum rates.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 27277
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - Nov 21

Postby dan_s » Mon Nov 22, 2021 11:33 am

On November 19, Reuters reported OPEC+ compliance with oil production cuts stood at 116% in October, up from 115% the previous month, internal data seen by Reuters showed, indicating the group continues to produce less than its agreed targets. Compliance for participating OPEC members in the group rose from 115% in September to 121% in October, the highest since May, the data showed. Compliance for non-OPEC participating producers stood at 106% in October, down from 114% in September.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 27277
Joined: Fri Apr 23, 2010 8:22 am


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