Oil & Gas Prices - Sept 21

Oil & Gas Prices - Sept 21

Postby dan_s » Wed Sep 21, 2022 9:40 am

Opening Prices:
> WTI is up $1.20 to $85.14/bbl, and Brent is up $1.32 to $91.94/bbl.
> Natural gas is up 21.6c to $7.933/MMBtu.


Oil rose by 1.5% on Wednesday morning after reports of an escalation in the Russia-Ukraine war
> Putin ordered a partial mobilization to hold onto the occupied territory in Ukraine
> This escalation could cause further disruption to energy supplies
> The heightened tension comes before the Federal Reserve makes a decision on monetary policy later on Wednesday
> Analysts estimate the Fed to raise the interest rates by at least 75 basis points to tame inflation

Putin declared a "partial mobilization" to maintain control of the occupied regions in Ukraine and called up 300,000 reservists to battle during a televised national address today (BBG, Reuters)
> Putin also reiterated his threat to use nuclear weapons, warning that “those who are trying to blackmail us with nuclear weapons should know that the wind patterns can also turn in their direction”
> The military buildup comes after a Ukrainian counter offensive over the past two weeks dealt Russian troops their worst defeats since the start of the war and retook over 10% of the territory that Russia had held

China began drawing down its crude oil reserves, which may be an indication that refineries are preparing to increase fuel exports as part of the government's initiatives to bolster the economy (BBG)
> Onshore crude inventories were at 909 MMBbl as of September 15, the lowest level since May 12, according to Emma Li, an analyst with Vortexa
> She added that around 1 MMBbl/d had been drawn from inventories over the past three weeks
> The drop in inventories may be seasonal, but it may also be a sign that refiners are increasing run rates in anticipation of producing and exporting more fuels
> Refiners and traders have applied for an extra 15 million tons (3.063 million barrels) of export quotas, which, if approved, would raise allocations so far this year to a level similar to that seen in 2021

BP’s Husky Toledo oil refinery in Oregon, Ohio, has been shut in after a fire occurred yesterday (Reuters)
> The refinery has a capacity of nearly 0.160 MMBbl/d
> On a daily basis, the refinery can produce 3.8 million gallons of gasoline, 1.3 million gallons of diesel fuel, and 600,000 gallons of jet fuel, according to the company’s fact sheet on the facility
> Workers finished a maintenance turnaround at the facility in recent weeks, and the plant had resumed operating, according to a source

Natural Gas

Prompt-month natural gas prices were up 3% early this morning.
> Lower 48 temperature forecasts have cooled slightly for the next ten days
> Early pipeline nominations indicate a production drop of 1 Bcf/d, bringing production down to the lower end of the summer range of around 96 Bcf/d

Natural gas prices at the Waha Hub continue to fall below Henry Hub price (EIA)
> The price difference between Henry Hub and the Waha hub has been widening since late 2021 and has gone from a difference of 24 cents in September 2021 to an average of $1.43 this past month
> Some of the differences can be attributed to infrastructure availability and increases in production
> Additional pipeline projects in the Permian are expected to expand takeaway capacity by 4.2 Bcf/d by the end of 2024

Tellurian cancels $1 billion bond deal used to fund LNG plant (BBG)
> Tellurian withdrew its offering citing uncertainty in high-yield bond markets
> The company has had difficulty financing its Driftwood LNG project located in Lake Charles, Louisiana
> Construction for Driftwood LNG began before the company obtained funding for the project, which has been planned for about six years
Dan Steffens
Energy Prospectus Group
Posts: 30119
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - Sept 21

Postby dan_s » Wed Sep 21, 2022 9:51 am

Investors see U.S. oil between $80 and $100/bbl next year -survey. Reuters.

"U.S. crude oil prices will average between $80 and $100 per barrel next year, investors attending a Barclays conference this month estimated, suggesting a stronger outlook than future prices suggest. Oil futures for October traded at $85 a barrel on Monday, with the outlook for 2023 at about $79 a barrel. Prices had traded over $100 a barrel earlier this year on Russia's invasion of Ukraine and subsequent sanctions. Oil has cooled on concerns of an economic slowdown. Separately, the Bank of America today boosted its 2023 U.S. oil price forecast by $4 to $94 a barrel, pointing to what it called a "modest but demonstrable production cut at the last OPEC+ meeting."
Always remember that the NYMEX strip is not a "forecast". The futures contracts are what upstream companies can use to look in future oil prices today.
Dan Steffens
Energy Prospectus Group
Posts: 30119
Joined: Fri Apr 23, 2010 8:22 am

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