Oil & Gas Prices - June 11

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - June 11

Post by dan_s »

From Market Pulse at 4:30AM ET
Oil markets in range-trade mode to end the week

Oil prices finished modestly higher yesterday after the US inflation data caused both contracts to spike lower initially. With markets seemingly comfortable with the Fed’s transitory narrative, oil quickly recovered. Brent crude finishing 0.47% higher at USD72.40 a barrel, and WTI closing 0.50% higher at USD70.10 a barrel.

News that Saudi Arabia has unwound all its voluntary production cuts are circulating in Asia today, and that appears to have temporarily pushed oil prices lower. As a result, Brent crude has fallen 0.25% to USD72.15, and WTI has eased 0.15% to USD69.93 a barrel. The reaction is modest, though, and if anything, the price action is bullish. It suggests that the physical market has absorbed extra Saudi production with ease and that demand globally is robust and climbing.

Barring any G-7 surprises and an unlikely US dollar rally, oil should resume its climb next week. Only a retreat by Brent crude through USD70.00, or USD68.00 a barrel for WTI, endangers the rally. Otherwise, Brent crude should target USD75.00 and WTI USD73.00 a barrel in the week ahead.
Dan Steffens
Energy Prospectus Group
dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - June 11

Post by dan_s »

Opening Prices:
> WTI is down 3c to $70.26/Bbl, and Brent is down 2c to $72.50/Bbl.
> Natural gas is up 11.3c to $3.262/MMBtu. < Should be a big day for our gassers.

AEGIS Notes
Oil

Oil prices are on track for a third consecutive week of gains on continued signs of an improving demand outlook
The International Energy Agency (IEA) warned that the market would need extra supply next year
The agency said Friday that OPEC+ would need to increase output to keep the market adequately supplied, though forecasted demand won’t reach pre-virus levels until late 2022

Road traffic in the U.S. and most of Europe is essentially back to pre-pandemic levels, but jet fuel remains much further away from where it was in 2019

One of the biggest wild cards for the oil market is when Iranian crude will return to the market
Nuclear talks involving Iran are set to resume in Vienna this weekend
OPEC will need to add about 1.4 MMBbl/d – or less if Iran clinches a deal to remove U.S. sanctions (IEA monthly report)

Natural Gas

The prompt-month (July ’21) Henry Hub contract is on track for its largest weekly gain since April
The contract is up 16.3c on the week as weather forecast have tilted warmer, while hydropower in the U.S. West has fallen off due to droughts

According to Bloomberg, three-fourths of the Western U.S. is gripped by a drought more severe than anything recorded in the history of the U.S. Drought Monitor. The reservoir level at the iconic Hoover Dam has plunged to its lowest level since 1937, which has caused its power generation capacity to slip by 25%. The dam provides power for nearly 8MM people in Arizona, SoCal, and Nevada (Bloomberg)

According to EIA930 data, U.S. hydropower generation is averaging 3,407 MW/d or -9.6 % lower year-over-year so far in June

Texas Eastern Transmission co. issued a new update on their 30” TETCO system outage
The company does not expect the 30” pipeline between Uniontown and Kosciusko to return to full service until late 3Q2021, at the earliest. A scope-of-work report is expected by the end of June
Dominion South differentials have fallen throughout the week, with the prompt contract trading 10c lower at around $-1.06, and the Summer ’21 strip down 8c at around $-1.20 behind Henry Hub
The reduced flows on TETCO are also tightening the Southeast gas market, helping support Henry Hub prices
Dan Steffens
Energy Prospectus Group
dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - June 11

Post by dan_s »

CNBC: Oil rises to fresh multi-year highs on demand recovery
PUBLISHED FRI, JUN 11 20211:34 AM EDT UPDATED 3 HOURS AGO

"U.S. investment bank Goldman Sachs expects Brent crude prices to reach $80 per barrel this summer as vaccination rollouts boost global economic activity."

Read more:
https://www.cnbc.com/2021/06/11/oil-mar ... tlook.html
Dan Steffens
Energy Prospectus Group
Fraser921
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Joined: Mon Mar 22, 2021 11:48 am

Re: Oil & Gas Prices - June 11

Post by Fraser921 »

goldman Sachs must read your stuff:

Goldman Sachs Raises Price Targets on Energy Stocks Amid Boost in Firm's Oil Price Outlook
BY MT Newswires
— 9:00 AM ET 06/11/2021
09:00 AM EDT, 06/11/2021 (MT Newswires) -- Goldman Sachs raised its price targets across many energy stocks Friday as the firm boosted its long-term oil price assumptions.

Goldman Sachs now sees long-term Brent oil prices at $65 per barrel, up from $60 per barrel. This drove a 12% increase, on average, in the firm's price targets for oil explorers and producers.

"Our more favorable long-term oil outlook is underpinned by the disciplined response we have seen from US shale producers thus far combined with expectation for higher oil demand and more limited contribution from non-OPEC ex-US oil over time," the firm said in a note to clients.

The firm said it is assuming Brent prices for 2021 and 2022 at $71 per barrel and $75 per barrel, respectively.

"This constructive view is driven by (1) outlook for a robust demand recovery globally led by improving vaccine roll out, and (2) discipline from global producers, with US shale companies continuing to prioritize free cash flow over production growth, OPEC+ taking a measured approach to ramping production, and minimal levels of investment in major capital projects driving lower non-OPEC ex-US production over time," Goldman Sachs added.
dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - June 11

Post by dan_s »

Goldman Sachs is one of the "Leaders of the Herd". Most of the Wall Street Gang are like sheep, they just follow the herd. My "mission" is to find the companies they haven't figured out yet.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34463
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - June 11

Post by dan_s »

Closing Prices:
> WTI prompt month (JUL 21) was up $0.62 on the day, to settle at $70.91/Bbl.
> Also, NG prompt month (JUL 21) was up $0.147 on the day, to settle at $3.296/MMBtu.

A "Double Wow!"
Dan Steffens
Energy Prospectus Group
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