Oil & Gas Prices - June 30

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dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - June 30

Post by dan_s »

Opening Prices:
> WTI is down $1.12 to $108.66/bbl, and Brent is down $0.57 to $115.69/bbl.
> Natural gas is down -10.6c to $6.392/MMBtu.

AEGIS Notes
Oil

OPEC+ agreed to 648 MBbl/d output increases in August, advancing their production targets for the year, despite some members struggling to achieve quotas
> The increase in production levels for August is in line with what OPEC+ decided for July
> AEGIS notes that OPEC+ is still likely to supply far less oil to the market than agreed, failing to provide the much-needed respite

Russia continues to export barrels of crude to India despite recent economic and energy sanctions on Moscow (BBG)
> Moscow is on track to deliver 1.0- 1.2 MMBbl/d to India this month as some refiners in India are purchasing discounted Urals after the Russian invasion
> The share of Iraq and Saudi Arabia in the world's largest oil-consuming area has been decreasing as a result of Russia's advance on the Indian and Chinese markets. The cumulative deliveries from the two countries to India have decreased by around 500 MBbl/d since April while Russian flows increased, according to tracking data

The U.S. gasoline market is showing signs of further softening just three weeks into the peak driving season (BBG)
> The four-week moving average of gasoline product supplied, the strongest indicator of demand, dropped below 9 MMBbl/d, or approximately 600 MBbl/d below usual seasonal levels, according to EIA
> Demand is likely under pressure as retail gas prices hit record highs of $5.016/gal on June 13 and have since only slightly decreased

Natural Gas

The EIA is expected to report an injection of 74 Bcf for the week ending June 24
> Responses to the survey ranged from 68 Bcf to 80 Bcf
> That compares with a build of 73 Bcf during the same week a year ago and a five-year average injection of 68 bcf
> This week’s inventory print would lift stockpiles to 2.243 Tcf, about 12.8% below the five-year average and 11.9% below the same week a year ago
> Aegis notes that if the 74-Bcf injection is confirmed, it would be slightly looser than the modeled five-year weather-adjusted injection of 57 Bcf

Shell PLC eyes deal with Qatar for mega-expansion LNG project
> Shell PLC is set to join other western energy majors in taking a stake in the $29B liquefaction project that would increase the country’s export capacity from around 77 million tons (10 Bcf/d) to around 110 million tons (14.41 Bcf/d)
> Qatar is increasing its export capacity for the super-chilled fuel amid a global energy crunch as countries rush to replace gas from the world’s second-largest gas-producing country
> Qatar and the U.S. have been competing to be the world’s largest exporting country in 2022, with the U.S. notching the top spot with the arrival of trains at Venture Global’s Calcasieu Pass
> AEGIS notes the U.S. captured the title of the world’s largest LNG exporter for the first time this year as Calcasieu Pass brought its trains online. The U.S. has also experienced a pickup in LNG infrastructure announcements. The U.S. currently has around 9 Bcf/d of capacity either under construction or planned to enter service by 2026
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - June 30

Post by dan_s »

Closing Prices:
> Prompt-Month WTI (Aug 22) was down $-4.02 on the day, to settle at $105.76 < For Q2 WTI averaged over $107/bbl, which compares to my forecast of $105/bbl. Big moves in commodity prices at the end of a quarter are common.
> Prompt-Month Henry Hub (Aug 22) was down $-1.074 on the day, to settle at $5.424 < For Q2 HH gas prices averaged close to my forecast of $7.50.

AEGIS Notes: Gas prices responded suddenly and violently in response to a disappointingly large build in gas inventories for last week, as announced by EIA. Also likely worrying the market is news that Freeport LNG will need to go through a PHMSA review before restarting their 2 Bcf/d facility south of Houston.
Dan Steffens
Energy Prospectus Group
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