Oil & Gas Prices - Dec 6

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

Oil & Gas Prices - Dec 6

Post by dan_s »

Opening Prices:
> WTI is up $2.09 to $68.35/Bbl, and Brent is up $2.10 to $71.98/Bbl.
> Natural gas is down 40.3c to $3.729/MMBtu.

AEGIS Notes
Oil


Oil futures rose over 3% Monday morning as Saudi Arabia boosted its price for its crude (BBG)
> The price hike could be a signal that the kingdom expects high demand for its crude despite fears of the Omicron variant
> Initial data from a major hospital complex in South Africa's Omicron epicenter show patients need less medical intervention

The chances of Iran rejoining the nuclear deal may be slipping away, according to the U.S. (Bloomberg)
> The U.S. briefing over the weekend was one of the most pessimistic American assessments of the negotiations yet
> In the seventh round of talks last week, Iran walked back many offers made in previous sessions and demanded sanctions relief that went beyond the terms of the original 2015 nuclear agreement
> Iran’s strategy appears to be to race ahead with nuclear advances to get more leverage in the talks; an official told Bloomberg
IMO Iran's new leader is just play Team Biden for the fools they are. They have no intention of slowing down their uranium enrichment program. When they have weapon's grade uranium it will be a whole new ballgame and they know it.

Natural Gas

The prompt-month gas (Jan ’22) contract is down by 40.3c or around 10%, to start the week near $3.729
> This morning's fall comes after gas prices posted their largest weekly loss since 2014 last week. The prompt contract lost $1.31 or 24% last week to finish at $4.132
> Given this morning's fall, the total losses amount to $1.719 or 31.56%

This weekend's weather runs were horrible for gas demand, which explains the drop in gas prices. The gas-weighted heating degree day total fell by 27.3 HDDs (6.15%) to 723 HDDs. This December is now forecast to be much warmer-than-normal and come in as one of the hottest of the millennia

Lower-48 dry gas production is climbing higher after falling in late November. According to Criterion Research, volumes reached 95.3 Bcf/d on Sunday

LNG feedgas demand is near its all-time high at 12.4 Bcf/d, though this morning's nominations show a decline of 0.3 Bcf/d at Freeport LNG
Sabine Pass LNG is slated to set a new record-high of 4.83 Bcf/d as flows to Train-6 continue to ramp up

The March-April spread, also known as the "widowmaker" spread, a proxy for how tight traders see inventory levels toward the end of the heating/withdrawal season, has narrowed to 10c down from a multi-year seasonal high of $1.80 in early October
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Remember that the gassers have a high percentage of their Q4 2021 natural gas hedged, so gas price fluctuation in December will not have much impact on their revenues.
Dan Steffens
Energy Prospectus Group
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