Oil & Gas Prices - Nov 23

Oil & Gas Prices - Nov 23

Postby dan_s » Tue Nov 23, 2021 9:49 am

Opening Prices:
> WTI is down 15c to $76.60/Bbl, and Brent is up 13c to $79.83/Bbl. < WTI moved quickly to over $78/bbl soon after the markets opened.
> Natural gas is up 16.1c to $4.950/MMBtu.

AEGIS Notes
Oil


The U.S. will tap its strategic reserves in a coordinated effort with China, Japan, India, South Korea, and the U.K. (Bloomberg)
> A total of 50 MMBbl will be released, with 32 MMBbl coming from the U.S. SPR as an exchange over the next several months.
> The White House said 18 MMBbl would be an accelerated release from previously authorized sale
> The move is likely bearish now but more bullish later as a significant chunk is borrowed to be returned later, possibly resulting in tighter balances down the line < MY TAKE: Biden's Team is to stupid to understand how the global oil market works. Also, the 50 MMBbl sounds big, but this world consumes close to 100 MMBbls per day of oil based products. Just from a political standpoint this could backfire on the Democrats and cause a spike on gasoline prices next summer right before the midterm elections.

OPEC+ members warned Monday that they are likely to respond to plans by nations to release oil from their reserves
> Delegates from OPEC said a coordinated release of oil inventories from their biggest customers is unjustified by current market conditions and may have to reconsider plans to add more oil production when they meet next week (BBG)
> “Such a move would potentially raise the stakes in the oil poker game and could produce new strains in the bilateral relationship between Washington and Riyadh, “ said Helima Croft, chief commodities strategist at RBC Capital Markets < I doubt that Biden's Team even considered this.

Natural Gas

Gas futures are up this morning, with the prompt-month (Dec' 21) contract trading 16.1c higher at $4.95
> The contract hit a two-month low during intraday trading yesterday as it came under pressure from mild weekend weather forecasts, and production increases
> LNG feedgas demand is down today (11.3 Bcf/d) as Freeport LNG seems to have pulled back its imports by 0.8 Bcf/d
> According to Criterion Research, feedgas flows to Cheniere's Sabine Pass Train 6 are around 325 MMcf/d

Northeast dry gas production pulled back, bringing U.S. lower-48 dry gas production to around 93 Bcf/d
> Overnight weather model runs were encouraging as the December gas-weighted heating degree day forecast total increased by 14.5 to 814

U.S. announces new Nord Stream 2 sanctions on Russian-linked entity and a vessel
> The State Department reported to Congress that it has designated a vessel and a "Russian-linked entity" called Transadria Ltd. that is linked to the controversial pipeline
> Germany's decision not to approve Nord Stream 2 because of a legal technicality already has analysts' saying the pipeline will not provide gas until at least February 2022
> The delays mean that European gas prices will likely see continued volatility as the current tight gas-market conditions persist

The world's largest Asian buyers of liquefied natural gas (LNG) are ramping up imports of the fuel in November, drawing more cargoes than Europe
> China, Japan, and South Korea are expected to import 16.62 MM tonnes, up from 15.13 in October, according to data compiled by Refinitiv
> Europe will import 7.23 MM tonnes in November, down from 7.28 MM tonnes last month

MY TAKE: There is a global shortage of natural gas and other fuels used for space heating. We may be one "Polar Vortex" away from seeing the highest natural gas and NGL prices we've seen in decades.
Dan Steffens
Energy Prospectus Group
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Re: Oil & Gas Prices - Nov 23

Postby dan_s » Tue Nov 23, 2021 10:27 am

EIA: Gas-fired capacity to grow in U.S.
The U.S. Energy Information Administration (EIA) estimates that between 2022 and 2025, 27.3 GW of new natural gas-fired power plants will come online in the U.S. This added capacity would increase current capacity (489.1 GW as of August 2021) by 6%. Many of the planned natural gas-fired capacity additions are located close to major shale plays in the Appalachia region and Texas and in Florida. The Appalachia region’s Marcellus and Utica shale plays stretch across Ohio, Pennsylvania, and West Virginia. These shale plays have led the growth in U.S. natural gas production over the past several years, accounting for 34% of U.S. dry natural gas production in the first half of 2021.

Top shale producers remain bullish on NGL prices as revenues climb again in Q3. S&P Global.
Top shale producers said they remain positive that NGL prices will continue to rise, after the commodity significantly boosted their financial results in the third quarter. During the quarter, Mont Belvieu NGL spot prices averaged $1.14 per gallon, a nearly 131% increase from the average in the same period a year earlier. In the last month of the quarter, NGL prices started to outpace the Brent crude oil futures prompt month contract, which averaged $73.21/barrel, representing a 69% boost from the prior year's average.

Prepare for volatility in natural gas markets. Oilprice.
Volatility in U.S. natural gas prices is set to continue in the coming weeks and during the winter, as a number of both bullish and bearish factors will alternate to impact market sentiment and prices. Record American liquefied natural gas (LNG) exports are set to support the benchmark U.S. natural gas price at Henry Hub, while a resurgence in COVID cases in many parts of the United States and Europe could slow down gas demand if economies also slow amid newly imposed restrictions and lockdowns. < MY TAKE: Travel restrictions have very little impact on demand for natural gas.

Keystone Pipeline developers seek $15B from U.S. MRT. < I love this!
Developers of Keystone XL are seeking to recoup more than $15 billion in damages connected to President Joe Biden’s decision to yank a permit for the border-crossing oil pipeline even after construction began. With a request for arbitration filed Monday, Calgary-based TC Energy Corp. formally opened one of the largest trade appeals ever against the U.S. and asked to put its long-running dispute over Keystone XL in front of an international arbitration panel. The legal claim is being mounted under provisions of the North American Free Trade Agreement that allow foreign companies to challenge U.S. policy decisions.

Americans blame high gas prices for “bad economy”. Oilprice.
Some 64 percent of respondents in a CBS News poll believe the U.S. economy is in bad shape. Of these, 74 percent are blaming the bad economy on high prices at the pump, the news outlet reported. According to the poll results, about 50 percent of Americans are worried about being able to afford to fill up their cars. The biggest concern of all, unsurprisingly, is inflation, for which the majority blames the supply chain problems caused by the pandemic. A smaller majority also blames the labor shortage, which has led to an increase in labor costs. < I blame it on Team Biden
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 27277
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - Nov 23

Postby Fraser921 » Tue Nov 23, 2021 10:54 am

Consider this , dumping 50 m bbl of oil brings in 3.7 b a small deposit on the 15 billion we will have to pay Canada for shutting down Keystone!
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