Opening Prices
>WTI is up $0.19 to $87.50/bbl, and Brent is up $0.17 to $93.34/bbl.
> Natural gas is up 34.8c to $8.632/MMBtu.
AEGIS NOTES
Oil
IEA published their September monthly report where the group said growth in oil demand is expected to come to a grinding halt in 4Q 2022 as the economic slowdown deepens
>The IEA cut its forecast for demand growth this year by 0.110 MMBbl/d to 2 MMBbl/d while keeping its 2023 growth forecast of 2.1 MMBbl/d
> This year, Chinese oil demand will decline by 0.420 MMBbl/d, or 2.7%, marking the first yearly decline since a 1% decline in 1990, said IEA
> The group added that oil consumption is set to decline as Covid-19 lockdowns and a real estate crisis hinder growth in the second-largest oil-consuming nation
OPEC+ released their September Oil Market Report yesterday, where the group maintained global 2022 crude demand growth at 3.1 MMBbl/d
> The bloc also reaffirmed that the paper and physical markets continue to be in stark dislocation amid increased volatility
> Additionally, OPEC+ maintained its 2.1 MMBbl/d projection for non-OPEC production growth in 2022
> Meanwhile, Saudi Arabia's crude output increased to over 11 MMBbl/d in August, the highest level since April 2020
The Biden administration is reportedly considering refilling the Strategic Petroleum Reserve at $80/Bbl (BBG)
>Officials in the Biden administration are debating the timing of such a move in order to safeguard U.S. oil production growth and prevent a sharp decline in crude prices, according to people familiar with the matter
> Biden ordered the release of a record 180 MMBbl of oil from the reserve in March in an attempt to resolve supply issues and the sharp increase in gasoline prices in the U.S. following Russia's invasion of Ukraine
> In addition, authorities are now aiming to slow those releases to control the market going into the winter
Meanwhile, the Strategic Petroleum Reserve has dropped to 442 MMBbl, its lowest level since 1984
Oil & Gas Prices - Sept 14
Oil & Gas Prices - Sept 14
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Sept 14
Natural gas
Mountain Valley Pipeline included in Republican permitting proposal (E&E)
On Monday, Republican senators introduced a permitting proposal intended to speed up the permitting process for new energy projects
Announced by West Virginia Sen. Shelley Moore Capito, it says Mountain Valley’s new permits would not be subject to judicial review
Judicial review is what has previously held up the pipeline project, as courts debated the environmental effects of the pipeline
However, regulatory experts said that the proposal does not guarantee the completion of the pipeline
Pemex and Mexican oil regulator at odds over the natural gas project (Reuters)
Officials at the regulator National Hydrocarbons Commission have raised questions about whether Pemex, the state-owned oil and gas company, can shoulder the massive project, as Mexican laws stipulate regulatory approval requires projects be both technically and economically viable
In July, Pemex and New Fortress announced a long-term partnership for Lakach that would supply gas for domestic use and produce LNG
The offshore Lakach field in the Gulf of Mexico holds has the potential to supply up to 1.8 Bcf/d
AEGIS notes that as Mexico currently imports about 6 Bcf/d from the U.S., an increase in Mexican production would lower gas demand in the U.S.
Mountain Valley Pipeline included in Republican permitting proposal (E&E)
On Monday, Republican senators introduced a permitting proposal intended to speed up the permitting process for new energy projects
Announced by West Virginia Sen. Shelley Moore Capito, it says Mountain Valley’s new permits would not be subject to judicial review
Judicial review is what has previously held up the pipeline project, as courts debated the environmental effects of the pipeline
However, regulatory experts said that the proposal does not guarantee the completion of the pipeline
Pemex and Mexican oil regulator at odds over the natural gas project (Reuters)
Officials at the regulator National Hydrocarbons Commission have raised questions about whether Pemex, the state-owned oil and gas company, can shoulder the massive project, as Mexican laws stipulate regulatory approval requires projects be both technically and economically viable
In July, Pemex and New Fortress announced a long-term partnership for Lakach that would supply gas for domestic use and produce LNG
The offshore Lakach field in the Gulf of Mexico holds has the potential to supply up to 1.8 Bcf/d
AEGIS notes that as Mexico currently imports about 6 Bcf/d from the U.S., an increase in Mexican production would lower gas demand in the U.S.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Sept 14
Trading Economics
WTI crude futures rebounded over 2% towards the $89-per-barrel mark, a level not seen in a week, as investors continued to assess the outlook for global demand. The International Energy Agency's latest report indicated a large-scale gas-to-oil switching in many countries, calculated to average 700,000 barrels per day from October 2022 to March 2023, double the level of a year ago. Still, the Paris-based organization pointed out that growth in global oil consumption is forecasted to weaken in the last quarter of 2022 as an economic slowdown intensifies but sees demand picking up strongly in 2023. The report came a day after OPEC offered an upbeat outlook, sticking to its forecasts for global solid oil demand growth in 2022 and next year, citing signs that developed economies remain resilient despite headwinds such as surging inflation.
US natural gas futures jumped more than 6% toward $8.8/MMBtu, the highest in almost 2 weeks and slowly approaching 14-year highs of $10 reached in August, boosted by higher demand forecast and more coal-to-gas switching in case of a rail strike. The potential railroad strike, which could come as early as Friday, could force generators to burn more gas to produce electricity as about two-thirds of the nation's coal-fired power plants receive their coal by rail. Average gas output in the US Lower 48 states rose to 99.1 bcfd so far in September from a record 98 bcfd in August, according to data provider Refinitiv. Average US gas demand, including exports, is expected to decrease to 93.7 bcfd next week, above Refinitiv's outlook on Tuesday, from 93.9 bcfd this week amid cooler autumn weather. Meanwhile, Freeport LNG expects a sharp delay in the restart of its Quintana export plant to November, leaving more gas in the US for utilities to inject into stockpiles for next winter.
WTI crude futures rebounded over 2% towards the $89-per-barrel mark, a level not seen in a week, as investors continued to assess the outlook for global demand. The International Energy Agency's latest report indicated a large-scale gas-to-oil switching in many countries, calculated to average 700,000 barrels per day from October 2022 to March 2023, double the level of a year ago. Still, the Paris-based organization pointed out that growth in global oil consumption is forecasted to weaken in the last quarter of 2022 as an economic slowdown intensifies but sees demand picking up strongly in 2023. The report came a day after OPEC offered an upbeat outlook, sticking to its forecasts for global solid oil demand growth in 2022 and next year, citing signs that developed economies remain resilient despite headwinds such as surging inflation.
US natural gas futures jumped more than 6% toward $8.8/MMBtu, the highest in almost 2 weeks and slowly approaching 14-year highs of $10 reached in August, boosted by higher demand forecast and more coal-to-gas switching in case of a rail strike. The potential railroad strike, which could come as early as Friday, could force generators to burn more gas to produce electricity as about two-thirds of the nation's coal-fired power plants receive their coal by rail. Average gas output in the US Lower 48 states rose to 99.1 bcfd so far in September from a record 98 bcfd in August, according to data provider Refinitiv. Average US gas demand, including exports, is expected to decrease to 93.7 bcfd next week, above Refinitiv's outlook on Tuesday, from 93.9 bcfd this week amid cooler autumn weather. Meanwhile, Freeport LNG expects a sharp delay in the restart of its Quintana export plant to November, leaving more gas in the US for utilities to inject into stockpiles for next winter.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Sept 14
Closing Prices:
> Prompt-Month WTI (Oct 22) was up $1.17 on the day, to settle at $88.48
> Prompt-Month Henry Hub (Oct 22) was up $0.830 on the day, to settle at $9.114
PS: I am back at my desk in Sugar Land. Hope to see many of you at tomorrow's luncheon.
> Prompt-Month WTI (Oct 22) was up $1.17 on the day, to settle at $88.48
> Prompt-Month Henry Hub (Oct 22) was up $0.830 on the day, to settle at $9.114
PS: I am back at my desk in Sugar Land. Hope to see many of you at tomorrow's luncheon.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group