Oil & Gas Prices - Nov 29
Posted: Mon Nov 29, 2021 9:39 am
Opening Prices:
> WTI is up $3.62 to $71.77/Bbl, and Brent is up $3.32 to $76.04/Bbl.
> Natural gas is down 52.5c to $4.952/MMBtu.
AEGIS Notes
Oil
WTI rebounded nearly 5% on Monday morning from one of the largest ever daily drops as investors assess the risks to global demand due to the new Omicron variant. Oil fell over $10 or 13% on Friday to $68.15/Bbl
OPEC+ have already moved its technical meetings in order to give themselves time to review Friday’s route (BBG)
OPEC and its allies will discuss their response to the Omicron variant at their meeting (Bloomberg)
> Ministers from OPEC are scheduled to meet on Dec. 2 to set their oil production policy for January
> The group is set to boost output by 400 MBbl/d, but some delegates say they may ditch the output increase in the short term
Technicals:
> WTI’s put skew soared to 21.77ppt as of Friday; the most bearish since May 2020
> WTI’s 2nd-month implied volatility jumped to 60.45% as of Friday; the highest since early November 2020
Natural Gas
The January ’21 gas contract is down by 52.5c this morning, near $4.952 in its first session as the prompt contract
> The December ’21 Henry Hub contract gained 37.9c in its expiry session on Friday, though the rally did not come from any significant weather changes or headlines. Instead, many analysts are chalking the gain to gas price’s inverted relationship to crude oil; When oil prices post such a large downside move, the expectation is that oil production and thereby associated gas supply will falter
> Weather forecasts shifted more bearish over the weekend, with the December 2021 gas-weighted heating degree day forecast losing 27 to bring the total to 780.7 days
> LNG feedgas demand is down around 0.62 Bcf/d from its record high of 12.47 Bcf/d set on November 26, as Freeport LNG feedgas demand is down by around 0.5 Bcf/d, again
U.S. dry gas production surged to 95 Bcf/d, a nearly two-year high as operators stage a near-winter push (Platts)
> The new high represents an eight-week drive by producers since September Hurricane Ida knocked lower-48 supply to 90.1 Bcf/d
> Appalachian production is at a record-high of around 34.7 Bcf/d as producers adjusted their fourth-quarter guidance to reflect gains ahead of Transco’s Leidy South Expansion Project
> Haynesville production has also set multiple record-highs and is now at more than 14.1 Bcf/d, while the Permian is just shy of its record at 13.6 Bcf/d
> The production gains in the Appalachian and Haynesville regions have come with relatively little change in the drilling rig total, as most gains in rigs have occurred in oil-focused plays, particularly the Permian
> WTI is up $3.62 to $71.77/Bbl, and Brent is up $3.32 to $76.04/Bbl.
> Natural gas is down 52.5c to $4.952/MMBtu.
AEGIS Notes
Oil
WTI rebounded nearly 5% on Monday morning from one of the largest ever daily drops as investors assess the risks to global demand due to the new Omicron variant. Oil fell over $10 or 13% on Friday to $68.15/Bbl
OPEC+ have already moved its technical meetings in order to give themselves time to review Friday’s route (BBG)
OPEC and its allies will discuss their response to the Omicron variant at their meeting (Bloomberg)
> Ministers from OPEC are scheduled to meet on Dec. 2 to set their oil production policy for January
> The group is set to boost output by 400 MBbl/d, but some delegates say they may ditch the output increase in the short term
Technicals:
> WTI’s put skew soared to 21.77ppt as of Friday; the most bearish since May 2020
> WTI’s 2nd-month implied volatility jumped to 60.45% as of Friday; the highest since early November 2020
Natural Gas
The January ’21 gas contract is down by 52.5c this morning, near $4.952 in its first session as the prompt contract
> The December ’21 Henry Hub contract gained 37.9c in its expiry session on Friday, though the rally did not come from any significant weather changes or headlines. Instead, many analysts are chalking the gain to gas price’s inverted relationship to crude oil; When oil prices post such a large downside move, the expectation is that oil production and thereby associated gas supply will falter
> Weather forecasts shifted more bearish over the weekend, with the December 2021 gas-weighted heating degree day forecast losing 27 to bring the total to 780.7 days
> LNG feedgas demand is down around 0.62 Bcf/d from its record high of 12.47 Bcf/d set on November 26, as Freeport LNG feedgas demand is down by around 0.5 Bcf/d, again
U.S. dry gas production surged to 95 Bcf/d, a nearly two-year high as operators stage a near-winter push (Platts)
> The new high represents an eight-week drive by producers since September Hurricane Ida knocked lower-48 supply to 90.1 Bcf/d
> Appalachian production is at a record-high of around 34.7 Bcf/d as producers adjusted their fourth-quarter guidance to reflect gains ahead of Transco’s Leidy South Expansion Project
> Haynesville production has also set multiple record-highs and is now at more than 14.1 Bcf/d, while the Permian is just shy of its record at 13.6 Bcf/d
> The production gains in the Appalachian and Haynesville regions have come with relatively little change in the drilling rig total, as most gains in rigs have occurred in oil-focused plays, particularly the Permian