Opening Prices:
> WTI is up 49c to $46.09/Bbl, and Brent is up 58c to $49.42/Bbl.
> Natural gas is up 10.5c to $2.504/MMBtu.
Oil & Gas Prices - Dec 9
Oil & Gas Prices - Dec 9
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Dec 9
Stifel's update on natural gas prices 12-9-2020
Oil & Gas Exploration and Production
Fundamental tenants of our natural gas bull thesis remain intact by Derrick Whitfield, an energy sector analyst at Stifel
"Front-month natural gas prices have declined by ~28% over the past five weeks due to unexpectedly warm weather. Based on heating degree days, the first month of withdrawal season was 22% below the 10-year average. With this backdrop, we see three debates driving the near-to-medium-term natural gas trade.
First, is natural gas an all or nothing trade based on oil macro?
Second, can natural gas work if the entire winter follows the November trend?
Third, can the Permian and Appalachia maintain their strong Q4 production trajectories?
In short, we believe the fundamentals tenants (associated gas decline, Appalachian producers' capital discipline, supportive export market) of our bull thesis on natural gas remain in-tact. While a warm winter could delay our bullish thesis, we still project significant undersupply in 2021 and beyond. Furthermore, lower prices from a warm winter would further pressure supply in 2021 and strengthen the bull case for 2022."
MY TAKE: Add the fact that U.S. natural gas exports are about 2 Bcfpd higher than the forecasts that I saw less than two months ago. LNG exports are running at 11 Bcfpd when I thought our export capacity was 10 Bcfpd. Exports via pipeline to Mexico are up over a Bcfpd YOY as well. All the gassers want for Christmas is a Polar Vortex.
Oil & Gas Exploration and Production
Fundamental tenants of our natural gas bull thesis remain intact by Derrick Whitfield, an energy sector analyst at Stifel
"Front-month natural gas prices have declined by ~28% over the past five weeks due to unexpectedly warm weather. Based on heating degree days, the first month of withdrawal season was 22% below the 10-year average. With this backdrop, we see three debates driving the near-to-medium-term natural gas trade.
First, is natural gas an all or nothing trade based on oil macro?
Second, can natural gas work if the entire winter follows the November trend?
Third, can the Permian and Appalachia maintain their strong Q4 production trajectories?
In short, we believe the fundamentals tenants (associated gas decline, Appalachian producers' capital discipline, supportive export market) of our bull thesis on natural gas remain in-tact. While a warm winter could delay our bullish thesis, we still project significant undersupply in 2021 and beyond. Furthermore, lower prices from a warm winter would further pressure supply in 2021 and strengthen the bull case for 2022."
MY TAKE: Add the fact that U.S. natural gas exports are about 2 Bcfpd higher than the forecasts that I saw less than two months ago. LNG exports are running at 11 Bcfpd when I thought our export capacity was 10 Bcfpd. Exports via pipeline to Mexico are up over a Bcfpd YOY as well. All the gassers want for Christmas is a Polar Vortex.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Dec 9
Closing Prices:
> WTI prompt month (JAN 21) was down $0.08 on the day, to settle at $45.52/Bbl.
> NG prompt month (JAN 21) was up $0.043 on the day, to settle at $2.442/MMBtu.
Nice to see the oil traders not overreact to the large crude oil inventory build.
> WTI prompt month (JAN 21) was down $0.08 on the day, to settle at $45.52/Bbl.
> NG prompt month (JAN 21) was up $0.043 on the day, to settle at $2.442/MMBtu.
Nice to see the oil traders not overreact to the large crude oil inventory build.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group