March 30 Podcast
March 30 Podcast
I recorded a podcast late on Saturday. It will be available on the website on Sunday.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: March 30 Podcast
The podcast is now available on the EPG website.
The WTI oil price increased by more than $12/bbl during the quarter, averaging more than $77/bbl during the quarter and closing out the quarter at $83.12/bbl. All of our upstream companies that get the majority of their revenues from oil sales should report strong Q1 2024 results.
Now that the Fear of Recession has faded, I believe that WTI has a good shot of increasing to $90/bbl within six months. As you can see on slide 4, EIA is now forecasting that global demand for transportation fuels will exceed global production. Refined product inventories will steadily decline over at least the next four months. U.S. refineries need to ramp up to more than 95% of capacity to keep up with demand for gasoline, diesel and jet fuel. During the week ending March 22nd, U.S. refineries were running at 88.7% of capacity. Another thing to keep in mind is that it requires more crude oil to make summer blends of gasoline, adding about 2 million bpd of demand for "Black Oil".
Natural gas prices declined during the quarter, but the low for the year ($1.54 on February 19) is hopefully in the rearview mirror. U.S. natural gas is the cheapest form of energy on Earth.
Henry Hub natural gas prices will struggle to get back over $2.00. We are getting a bit of late season help from the weather. The natural gas storage report for the week ending March 29 should show a draw in the 40 to 45 Bcf range. A wintery mix is still impacting some areas in the Northeast, but the Refill Season begins in April with a 650 Bcf surplus to the 5-year average in storage. Increasing LNG exports by getting Freeport back to full capacity and putting Venture Global's big new export facility at Plaquemines, Louisiana online in Q3 should rebalance the U.S. natural gas market. Cheniere's export facility at Corpus Christi, Texas should be starting up a 3rd train in Q4 and Exxon's Golden Pass Train 1 also comes online before year-end.
For my April newsletter I will be using higher oil prices and lower natural gas prices for my stock valuations, which are shown on slide 12.
The WTI oil price increased by more than $12/bbl during the quarter, averaging more than $77/bbl during the quarter and closing out the quarter at $83.12/bbl. All of our upstream companies that get the majority of their revenues from oil sales should report strong Q1 2024 results.
Now that the Fear of Recession has faded, I believe that WTI has a good shot of increasing to $90/bbl within six months. As you can see on slide 4, EIA is now forecasting that global demand for transportation fuels will exceed global production. Refined product inventories will steadily decline over at least the next four months. U.S. refineries need to ramp up to more than 95% of capacity to keep up with demand for gasoline, diesel and jet fuel. During the week ending March 22nd, U.S. refineries were running at 88.7% of capacity. Another thing to keep in mind is that it requires more crude oil to make summer blends of gasoline, adding about 2 million bpd of demand for "Black Oil".
Natural gas prices declined during the quarter, but the low for the year ($1.54 on February 19) is hopefully in the rearview mirror. U.S. natural gas is the cheapest form of energy on Earth.
Henry Hub natural gas prices will struggle to get back over $2.00. We are getting a bit of late season help from the weather. The natural gas storage report for the week ending March 29 should show a draw in the 40 to 45 Bcf range. A wintery mix is still impacting some areas in the Northeast, but the Refill Season begins in April with a 650 Bcf surplus to the 5-year average in storage. Increasing LNG exports by getting Freeport back to full capacity and putting Venture Global's big new export facility at Plaquemines, Louisiana online in Q3 should rebalance the U.S. natural gas market. Cheniere's export facility at Corpus Christi, Texas should be starting up a 3rd train in Q4 and Exxon's Golden Pass Train 1 also comes online before year-end.
For my April newsletter I will be using higher oil prices and lower natural gas prices for my stock valuations, which are shown on slide 12.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group