Opening Prices:
WTI is down 32c to $56.91/Bbl, and Brent is down 51c to $62.45/Bbl.
Natural gas is down 1.7c to $2.845/MMBtu.
Details here: https://aegis-energy.com/november-6-2019/
EIA's weekly report on Petroleum will come out at 9:30 AM CT
Oil Price - Nov 6
Oil Price - Nov 6
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Nov 6
The weather forecast for next week looks even more bullish for natural gas: https://www.wunderground.com/ndfdimage/ ... mint&msg=6
So, if we have the coldest November in decades does that mean Global Warming is on hold?
So, if we have the coldest November in decades does that mean Global Warming is on hold?
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Nov 6
Closing prices:
WTI prompt month (DEC 19) was down $0.88 on the day, to settle at $56.35/Bbl.
NG prompt month (DEC 19) was down $0.034 on the day, to settle at $2.828/MMBtu.
Traders always have a knee jerk reaction to the crude oil inventory number. Reality is that the numbers that EIA puts out each week are pure guestimates. All inventories are well within the 5-year range and lower than where they should be on days of supply. Gasoline, jet fuel and distillate inventories days of supply all went lower (bullish).
Details here: https://www.eia.gov/dnav/pet/pet_sum_sn ... _nus_w.htm
Good news is that buyers came in strong above $56/bbl.
WTI prompt month (DEC 19) was down $0.88 on the day, to settle at $56.35/Bbl.
NG prompt month (DEC 19) was down $0.034 on the day, to settle at $2.828/MMBtu.
Traders always have a knee jerk reaction to the crude oil inventory number. Reality is that the numbers that EIA puts out each week are pure guestimates. All inventories are well within the 5-year range and lower than where they should be on days of supply. Gasoline, jet fuel and distillate inventories days of supply all went lower (bullish).
Details here: https://www.eia.gov/dnav/pet/pet_sum_sn ... _nus_w.htm
Good news is that buyers came in strong above $56/bbl.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Nov 6
Comments from Raymond James on 11-6-2019
This week's petroleum inventories update was bearish relative to consensus. "Big Three" petroleum inventories (crude, gasoline, distillates – including SPR) rose by 3.8 MMBbls, versus consensus estimates calling for a draw of 2.1 MMBbls. Turning to crude, total inventories increased by 7.2 MMBbls, versus consensus calling for a build of 0.8 MMBbls and a normal seasonal build of 2.8 MMBbls – note the total number includes a 0.7 MMBBl draw in the SPR. Refinery utilization fell to 86.0% from 87.7% last week. Total petroleum product demand decreased 2.1% after last week’s 2.0% increase. On a four-week moving average basis, there is a 2.4% y/y increase in total demand.
Signs of progress in the U.S.-China trade talks have given oil prices a modest boost in recent weeks, but prices are still weighed down by the macro sentiment, with day-to-day choppiness dominated by demand-related fears. Even setting aside the risk of further oil supply disruptions in Saudi, the fundamentally bullish supply side of the equation is largely being overlooked: the larger U.S. producers are exhibiting restraint in capital allocation, and U.S. well productivity improvements are slowing down; OPEC plus Russia’s production cuts – in place through March 2020 (and with chatter about a further extension) – include especially strong Saudi discipline; U.S. sanctions against Iran continue to be impactful; and IMO 2020 is on deck two months from now. The 12-month futures strip ($55.74/Bbl for WTI and $60.33/Bbl for Brent) shows modest backwardation for both Brent and WTI; for comparison, our 2020 forecast is $70.00 WTI/$75.00 Brent. There remain several key question marks, such as: 1) on the bullish side, the possibility of supply disruptions above and beyond the current ones, such as a potential scenario of military escalation vis-à-vis Iran, and 2) on the bearish side, an apparent global manufacturing slowdown and resulting read-through for oil demand.
A member of the Raymond James Energy Sector Research Team will be our opening speaker on November 13 at the Hess Club.
This week's petroleum inventories update was bearish relative to consensus. "Big Three" petroleum inventories (crude, gasoline, distillates – including SPR) rose by 3.8 MMBbls, versus consensus estimates calling for a draw of 2.1 MMBbls. Turning to crude, total inventories increased by 7.2 MMBbls, versus consensus calling for a build of 0.8 MMBbls and a normal seasonal build of 2.8 MMBbls – note the total number includes a 0.7 MMBBl draw in the SPR. Refinery utilization fell to 86.0% from 87.7% last week. Total petroleum product demand decreased 2.1% after last week’s 2.0% increase. On a four-week moving average basis, there is a 2.4% y/y increase in total demand.
Signs of progress in the U.S.-China trade talks have given oil prices a modest boost in recent weeks, but prices are still weighed down by the macro sentiment, with day-to-day choppiness dominated by demand-related fears. Even setting aside the risk of further oil supply disruptions in Saudi, the fundamentally bullish supply side of the equation is largely being overlooked: the larger U.S. producers are exhibiting restraint in capital allocation, and U.S. well productivity improvements are slowing down; OPEC plus Russia’s production cuts – in place through March 2020 (and with chatter about a further extension) – include especially strong Saudi discipline; U.S. sanctions against Iran continue to be impactful; and IMO 2020 is on deck two months from now. The 12-month futures strip ($55.74/Bbl for WTI and $60.33/Bbl for Brent) shows modest backwardation for both Brent and WTI; for comparison, our 2020 forecast is $70.00 WTI/$75.00 Brent. There remain several key question marks, such as: 1) on the bullish side, the possibility of supply disruptions above and beyond the current ones, such as a potential scenario of military escalation vis-à-vis Iran, and 2) on the bearish side, an apparent global manufacturing slowdown and resulting read-through for oil demand.
A member of the Raymond James Energy Sector Research Team will be our opening speaker on November 13 at the Hess Club.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group