Oil & Gas Prices - Aug 12

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

Oil & Gas Prices - Aug 12

Post by dan_s »

Opening Prices:
> WTI is down $1.54 to $92.80/bbl, and Brent is down $1.45 to $98.15/bbl.
> Natural gas is down -15.2c to $8.722/MMBtu.

AEGIS Notes
Oil


Shell announced the closure of six oil and gas fields in the Gulf of Mexico after discovering a leak at a Louisiana booster station and halted two nearby pipelines
> That resulted in the closure of Shell’s Mars, Ursa and Olympus fields, as well as Chevron’s Jack/St. Malo, Tahiti and Big Foot fields
> The Mars and Amberjack pipelines transport roughly 500 MBbl/d of crude from the Gulf
< Today, Mars and Amberjack pipelines may resume operations after Shell confirmed the leak had been contained

EU offers Iran a significant concession to revive the nuclear deal (WSJ)
> Diplomats offer a way to end the probe by the International Atomic Energy Agency into undeclared nuclear material found in Iran in 2019
> The EU has informed Iran and the other parties that it wants a yes-or-no answer to the negotiations by August 15
> If the U.S. and Iran can agree to revive the deal, oil sanctions relief as part of the deal could return as much as 1 MMBbl/d to the tight global market that has few options for near-term incremental supply

Natural Gas

Natural gas futures rose to nearly $9/mmbtu yesterday following news reports of the gulf coast pipeline outage and the EIA storage report
> The EIA reported an injection of 44 Bcf, which fell on the (bearish) higher-end of the 30-44 Bcf range reported by analysts
> This leaves total gas in storage at 2,501 Bcf, which is 268 Bcf less than one year ago and 338 Bcf below the five-year average
> Prices have softened this morning, with the prompt month trading down 1.5%

U.S. questioned Cheniere pollution controls during LNG plant permitting (Reuters)
> U.S. regulators raised doubts about Cheniere Energy's decision to install higher-polluting gas-fired turbines at its Gulf Coast LNG terminals in Texas and Louisiana years before they began operating
> The documents show that Cheniere, the top U.S. LNG exporter, may have had a chance to avoid its current struggle with looming federal limits on emissions of formaldehyde and other dangerous chemicals
> The Texas-based company could be forced to undertake outages that might reduce or slow gas shipments to make upgrades
> Cheniere said its turbine technology was in compliance with air quality rules in place at the time they were proposed, and it believes the EPA should exempt it from the emissions limits
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - Aug 12

Post by dan_s »

U.S. NatGas jumps 8% on talk of higher flows to Freeport LNG. Reuters.

U.S. natural gas futures jumped about 8% to a two-week high on Thursday on talk of increased gas flows to the Freeport liquefied natural gas export plant in Texas, which shut in June, a drop in gas output and forecasts for more demand over the next two weeks than previously expected. Officials at Freeport said the company was still using the gas to feed a power plant that was generating electricity for the Texas grid. Freeport has been pulling in gas to feed the power plant since around mid-July.

MY TAKE: When the Freeport LNG export facility is fully back online in October, we will see HH ngas spike to over $10 in early Q4.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - Aug 12

Post by dan_s »

Trading Economics:

WTI crude futures eased below $93 per barrel on Friday, pressured by uncertainty regarding the extent that the global economic slowdown may have on energy demand. Recession concerns led OPEC to cut its forecasts for this year’s oil demand by 260 thousand bpd to 3.1 million. Conversely, the IEA raised its forecast for global oil consumption by 380 thousand bpd to 2.1 million, citing a global switch from natural gas to oil due to supply shocks and surging prices for the former. The Paris-based agency also said that OPEC+ producers have limited spare capacity and cannot raise output much higher. Still, crude prices are set to rebound 4% from last week’s sharp decline. Bullish support came from easing concerns that the Fed will engage in prolonged demand destruction to curb inflation after US CPI figures surprised on the downside. In the meantime, six oil and gas fields in the Gulf of Mexico have been shut after a leak at a Louisiana booster station halted two pipelines.

US Natural Gas futures were trading around the $8.7/MMBtu mark, jumping roughly 8% this week and moving closer to a 14-year peak of $9.75/MMBtu hit in late July, buoyed by strong overseas and domestic demand. The temperatures in the US this summer remain high with several heatwaves boosting demand for air conditioners. Meanwhile, Freeport LNG has recently agreed with regulators to partially restart operations in October at its shuttered export plant in Texas and said it began to pull in tiny amounts of natural gas from pipelines. The resumption of flows will withdraw more natural gas from storage and boost exports. Adding to woes, demand from Europe remains strong as the critical Nord Stream 1 pipeline from Russia to Germany is currently running at 20% capacity.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - Aug 12

Post by dan_s »

Nigeria’s Spare Capacity Sees Major Cut. The International Energy Agency has cut Nigeria’s sustainable oil production levels by some 200,000 b/d to 1.3 million b/d, a reflection of the African country’s gradually declining production rates and lack of progress on sabotage and oil theft.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - Aug 12

Post by dan_s »

Closing Prices:
> Prompt-Month WTI (Sep 22) was down $-2.25 on the day, to settle at $92.09
> Prompt-Month Henry Hub (Sep 22) was down $-0.106 on the day, to settle at $8.768

Despite today's "profit taking", this was a good week for oil & gas price. HH ngas over $8.75 in mid-August is amazing and the real Bidding War hasn't started.
Dan Steffens
Energy Prospectus Group
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