Oil & Gas Prices - Nov 23
Posted: 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.
> 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.