Opening Prices:
> WTI is up $1.05 to $41.00/Bbl, and Brent is up $1.10 to $43.09/Bbl.
> Natural gas is down 4.3c to $2.563/MMBtu.
Hurricane Delta is heading straight for South Louisiana and is likely to force shut-in of some LNG export facilities for a few days. After dipping below 3 BCF per day in August, we've seen two spikes to over 8 BCF per day since mid September. When all U.S. LNG export facilities are back on-line our export capacity is 9.5 Bcfpd.
Closing Prices:
> WTI prompt month (NOV 20) was up $1.24 on the day, to settle at $41.19/Bbl.
> NG prompt month (NOV 20) was up $0.021 on the day, to settle at $2.627/MMBtu.
Oil & Gas Prices - Oct 8
Oil & Gas Prices - Oct 8
Last edited by dan_s on Thu Oct 08, 2020 4:36 pm, edited 1 time in total.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Oct 8
EIA's Natural Gas Price forecast - Oct 8
Postby dan_s » Thu Oct 08, 2020 7:42 am
A colder winter will drive the average price of natural gas to $3.38 per million British thermal units (MMBtu) in January, the U.S. Energy Information Administration (EIA) forecasts.
The EIA’s newly released Short-Term Energy and Winter Fuels Outlook expects the average price of gas to soar from $1.92/MMBtu in September on rising domestic demand and increased demand for LNG exports, as well as reduced production. Even with inventories expected to reach a record 4 trillion cubic feet (Tcf) by the end of October, higher withdrawals than the five-year average will drag that total to 1.7 Tcf, 6% below the average for 2016-2020 by the end of March.
If you watched the Aegis Energy webinar (we emailed you the link) you now know that exports of U.S. natural gas will soon reach a record. Daily LNG exports are expected to reach capacity of 9.5 BCF per day and exports via pipeline to Mexico and Eastern Canada will be 4 to 5 BCF per day. Twenty years ago just the domestic demand for U.S. gas was 20 to 22 Bcfpd and we were a net importer of natural gas.
Postby dan_s » Thu Oct 08, 2020 7:42 am
A colder winter will drive the average price of natural gas to $3.38 per million British thermal units (MMBtu) in January, the U.S. Energy Information Administration (EIA) forecasts.
The EIA’s newly released Short-Term Energy and Winter Fuels Outlook expects the average price of gas to soar from $1.92/MMBtu in September on rising domestic demand and increased demand for LNG exports, as well as reduced production. Even with inventories expected to reach a record 4 trillion cubic feet (Tcf) by the end of October, higher withdrawals than the five-year average will drag that total to 1.7 Tcf, 6% below the average for 2016-2020 by the end of March.
If you watched the Aegis Energy webinar (we emailed you the link) you now know that exports of U.S. natural gas will soon reach a record. Daily LNG exports are expected to reach capacity of 9.5 BCF per day and exports via pipeline to Mexico and Eastern Canada will be 4 to 5 BCF per day. Twenty years ago just the domestic demand for U.S. gas was 20 to 22 Bcfpd and we were a net importer of natural gas.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Oct 8
Energy Report: Delta Dawn
By Phil Flynn (Oct 08, 2020 09:39AM ET)
Crude Oil prices are rebounding on hopes that Hurricane Delta might not be as catastrophic as feared. The oil price sold off on fear the storm would create massive demand destruction because of power outages and flooding, but with forecasts seeming lowering the strength of the hurricane means that production and demand might come back faster than anticipated.
The storm is headed directly toward some significant refineries in Louisiana. Fox News reports that, “Delta strengthened back to a Category 2 storm early Thursday and will likely bring hurricane conditions and “life-threatening” storm surge along portions of the northern Gulf Coast on Friday. As of 4 a.m. CDT, the storm was located about 450 miles south-southeast of Cameron, La., with maximum sustained winds of 100 mph — up from 90 mph on Wednesday night, according to the National Hurricane Center (NHC). Delta could produce up to 15 inches of rain for southwest into south-central Louisiana, according to Fox News.
Yet talk that cool water and wind shear could weaken the storm as it reaches land and not be nearly as strong as the previous storm Hurricane Laura, should mean the recovery after the storm hopefully will be quick.
While hopes are high that U.S. Gulf production might come back on quickly after the storm, there are concerns that Norway’s output will get shut-in due to a strike. Reuters reports that, “A strike by Norwegian oil workers could knock out almost a quarter of the country’s petroleum production by October 14, operators say, raising the prospect of further price rises on the international oil market. The price of North Sea oil (LCOc1) rose by around 1.1% to $42.46 a barrel by 0755 GMT on Thursday, Refinitiv data showed. The dispute began on September 30 when wage talks between the Lederne union and the organization representing oil companies collapsed, but the first production outages only started on October 5.
Reuters says that, “The union wants to match workers’ pay and conditions at onshore remote control rooms with those of offshore workers and have a higher increase in this year’s wage round than proposed by oil firms. Six offshore oil and gas fields shut down on Monday as Lederne ramped up its strike, cutting output capacity by 8%, or around 330,000 barrels of oil equivalent per day (boepd), the Norwegian Oil and Gas Association (NOG) said. U.S. oil major ConocoPhillips (NYSE:COP) announced on Thursday the planned shutdown on October 10 of its Ekofisk 2/4 B platform, with the output of 7,000 boepd, one of eight offshore facilities at the giant field. Another six oil and gas field could wholly or partly close by October 14, including the Ekofisk platform, the industry has said.
The Energy Information Administration (EIA) report was also supportive as gasoline demand is going up while jet fuel demand lags. U.S. oil production got back to 11 million barrels a day, but the Strategic Petroleum Reserves continue to empty as demand rises.
The EIA reported that crude oil inventories increased by 0.5 million. Gasoline stocks fell by 1.4 million barrels last week and are now at the five year average for this time of year. Gasoline is a problem for refiners as they have to balance the diesel glut against the rising demand for gasoline. The gasoline supply could tighten, and prices at the pump will start to rise.
Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories fell by 1.0 million barrels last week and are about 23% above the five year average for this time of year. Total commercial petroleum inventories fell by 2.0 million barrels last week.
Peak demand! Well, not just yet. OPEC I released its World Oil Outlook 2045. They predict that global oil demand to rise from 99.7mbpd in 2019 to 109.1mbpd in 2045. While that is 1 million barrels of oil a day less than their last forecast, it does not suggest that oil demand has peaked just yet. In fact, with low prices and the lack of investment, I assume that oil demand will more than exceed OPEC prediction. < Per the Raymond James most recent oil price forecast, by the end of Q3 2021 the world will need all of OPEC+ production capacity back online to meet demand because on the big decline in Non-OPEC+ production.
By Phil Flynn (Oct 08, 2020 09:39AM ET)
Crude Oil prices are rebounding on hopes that Hurricane Delta might not be as catastrophic as feared. The oil price sold off on fear the storm would create massive demand destruction because of power outages and flooding, but with forecasts seeming lowering the strength of the hurricane means that production and demand might come back faster than anticipated.
The storm is headed directly toward some significant refineries in Louisiana. Fox News reports that, “Delta strengthened back to a Category 2 storm early Thursday and will likely bring hurricane conditions and “life-threatening” storm surge along portions of the northern Gulf Coast on Friday. As of 4 a.m. CDT, the storm was located about 450 miles south-southeast of Cameron, La., with maximum sustained winds of 100 mph — up from 90 mph on Wednesday night, according to the National Hurricane Center (NHC). Delta could produce up to 15 inches of rain for southwest into south-central Louisiana, according to Fox News.
Yet talk that cool water and wind shear could weaken the storm as it reaches land and not be nearly as strong as the previous storm Hurricane Laura, should mean the recovery after the storm hopefully will be quick.
While hopes are high that U.S. Gulf production might come back on quickly after the storm, there are concerns that Norway’s output will get shut-in due to a strike. Reuters reports that, “A strike by Norwegian oil workers could knock out almost a quarter of the country’s petroleum production by October 14, operators say, raising the prospect of further price rises on the international oil market. The price of North Sea oil (LCOc1) rose by around 1.1% to $42.46 a barrel by 0755 GMT on Thursday, Refinitiv data showed. The dispute began on September 30 when wage talks between the Lederne union and the organization representing oil companies collapsed, but the first production outages only started on October 5.
Reuters says that, “The union wants to match workers’ pay and conditions at onshore remote control rooms with those of offshore workers and have a higher increase in this year’s wage round than proposed by oil firms. Six offshore oil and gas fields shut down on Monday as Lederne ramped up its strike, cutting output capacity by 8%, or around 330,000 barrels of oil equivalent per day (boepd), the Norwegian Oil and Gas Association (NOG) said. U.S. oil major ConocoPhillips (NYSE:COP) announced on Thursday the planned shutdown on October 10 of its Ekofisk 2/4 B platform, with the output of 7,000 boepd, one of eight offshore facilities at the giant field. Another six oil and gas field could wholly or partly close by October 14, including the Ekofisk platform, the industry has said.
The Energy Information Administration (EIA) report was also supportive as gasoline demand is going up while jet fuel demand lags. U.S. oil production got back to 11 million barrels a day, but the Strategic Petroleum Reserves continue to empty as demand rises.
The EIA reported that crude oil inventories increased by 0.5 million. Gasoline stocks fell by 1.4 million barrels last week and are now at the five year average for this time of year. Gasoline is a problem for refiners as they have to balance the diesel glut against the rising demand for gasoline. The gasoline supply could tighten, and prices at the pump will start to rise.
Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories fell by 1.0 million barrels last week and are about 23% above the five year average for this time of year. Total commercial petroleum inventories fell by 2.0 million barrels last week.
Peak demand! Well, not just yet. OPEC I released its World Oil Outlook 2045. They predict that global oil demand to rise from 99.7mbpd in 2019 to 109.1mbpd in 2045. While that is 1 million barrels of oil a day less than their last forecast, it does not suggest that oil demand has peaked just yet. In fact, with low prices and the lack of investment, I assume that oil demand will more than exceed OPEC prediction. < Per the Raymond James most recent oil price forecast, by the end of Q3 2021 the world will need all of OPEC+ production capacity back online to meet demand because on the big decline in Non-OPEC+ production.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Oct 8
Looking over the details of the EIA's weekly petroleum report found here: https://www.eia.gov/dnav/pet/pet_sum_sn ... _nus_w.htm
The primary reason that U.S. commercial crude oil inventories increased during the week ending October 2 is because imports went up 816,000 bbls per day from the previous week. Next week's report should show a big decline in imports and U.S. oil production because of Hurricane Delta.
Oil Tanker Captains know to get out of the way of major hurricanes. Delta is creating over 50 foot waves and tankers don't hold up well in seas like that. 400,000 to 500,000 barrels oil per day of GOM production will be shut-in from Wednesday through Sunday. Crews will be heading out to inspect production platforms on Saturday afternoon after Delta moves inland. Hurricane Laura did a lot of damage to shore bases, which slowed down the recovery.
The primary reason that U.S. commercial crude oil inventories increased during the week ending October 2 is because imports went up 816,000 bbls per day from the previous week. Next week's report should show a big decline in imports and U.S. oil production because of Hurricane Delta.
Oil Tanker Captains know to get out of the way of major hurricanes. Delta is creating over 50 foot waves and tankers don't hold up well in seas like that. 400,000 to 500,000 barrels oil per day of GOM production will be shut-in from Wednesday through Sunday. Crews will be heading out to inspect production platforms on Saturday afternoon after Delta moves inland. Hurricane Laura did a lot of damage to shore bases, which slowed down the recovery.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group