Oil & Gas end of day prices - Oct 4

[dan_s]

WTI prompt month (NOV 19) was up $0.36 on the day, to settle at $52.81/Bbl.
NG prompt month (NOV 19) was up $0.023 on the day, to settle at $2.352/MMBtu.

Oil prices dropped sharply during trading on Thursday but recovered on hopes of more aggressive action from the Federal Reserve. The U.S. jobs report on Friday revealed more weakness, but it wasn’t as poor as feared. Geopolitical risk has receded from the top of minds of oil traders. Everything is about weak demand now.

OPEC production fell most in 16 years in September. Largely due to the Abqaiq attack, OPEC’s oil production fell sharply in September. It was the single-largest disruption in history when it occurred, although its short duration meant that the outage fell short of the PDVSA strike in 2002 in terms of total volumes lost. Still, oil prices languish as demand continues to weaken. “Oil-demand growth is hitting the skids as macroeconomic, trade, and political risk drivers continue to intensify, from Brexit to impeachment through Persian Gulf conflict risk and the U.S.-China trade war,” Bob McNally, president of Rapidan Energy Group, told Bloomberg. < Traders are ignoring the tensions in the Middle East.

Unrest in Iraq puts spotlight on oil. Iraqi security forces have tried to violently suppress widespread protests in the country, and there is little sign of a resolution. Oil production has not been affected yet.

U.S. SPR more limited than expected. The U.S. strategic petroleum reserve is thought to be a massive trove of oil that can be readily deployed. For instance, in a hypothetical outage in the Strait of Hormuz, the U.S. should be expected to withdraw 3.5 mb/d of oil from the SPR. But the reserve might not be able to pull that off. Changes in pipeline flows, and huge increases in upstream production mean that only about 1.5 mb/d can be drawn down at a time, according to Platts. < Keep in mind that the U.S. is more insulated from supply problems in the Middle East or North Africa, but oil prices are determined on a global market. It there is a global shortage of oil, the price of gasoline and other refined products will soar in the U.S. as well.