Opening Prices:
> WTI is up 51c to $53.49/Bbl, and Brent is up 38c to $56.28/Bbl.
> Natural gas is down 6.4c to $2.482/MMBtu.
Closing Prices:
> WTI prompt month (FEB 21) was up $0.26 on the day, to settle at $53.24/Bbl.
> In contrast, NG prompt month (FEB 21) was down $0.007 on the day, to settle at $2.539/MMBtu.
Bloomberg -- Brent oil extended gains to above $56 a barrel, rising with other assets on hopes of more U.S. economic stimulus.
While crude prices have undulated with the dollar and broader risk assets in recent days, it’s also being supported by renewed strength in the market’s structure.
U.S. crude’s closest contract is near the most expensive versus those for six months out in more than a year. It’s a similar picture for Brent. The structure, known as backwardation, indicates tight supply.
The International Energy Agency this week said it expects inventories to fall by 100 million barrels this quarter, despite a surge in Covid-19 outbreaks.
Traders have piled into oil this year, with output cuts from Saudi Arabia helping drive prices to the highest since February. Virus vaccines have boosted oil demand and the global economy, and U.S. Treasury Secretary nominee Janet Yellen on Tuesday called on lawmakers to “act big” on stimulus. Still, the pandemic continues to be a risk with China locking down part of Beijing in the worst outbreak in months and Europe also reeling.
“As long as investors believe vaccinations will bring back normal life at some stage later this year every setback is used to buy into the market,” said Giovanni Staunovo, an analyst at UBS Group AG.
Chinese imports of U.S. and Russian crude last month were at similar levels to November, while purchases from Saudi Arabia and Iraq fell, according to customs data released Wednesday. Imports from Iran almost doubled.
Oil & Gas Prices - Jan 20
Oil & Gas Prices - Jan 20
Last edited by dan_s on Wed Jan 20, 2021 6:41 pm, edited 1 time in total.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Jan 20
Aegis Morning Notes: with my comment in blue
Oil:
President-elect Biden will cancel the Keystone Pipeline using an executive order during his first day in office
Biden has said that the pipeline does not serve the “U.S. national interest,” and onlookers expect the executive order will stick
AEGIS notes that while the move may harm Canadian producers, U.S. producers will likely benefit from the reduced supplies from the Alberta oil sands and the price response. Dumb because moving oil via pipeline is the safest way to transport it.
U.S. Treasury Secretary Janet Yellen calls on lawmakers to “act big” on additional coronavirus relief spending
At her confirmation hearing on Tuesday, Yellen said the benefits of a big stimulus package to counter the coronavirus pandemic were greater than the expenses of a higher debt burden
The dollar slipped by 21 pips from its one-month high of $90.765 to $90.54 on Wednesday
The new stimulus package is likely to affect oil prices on two fronts. The first being that the additional income could help spur consumer spending. Additionally, the increased fiscal spending will likely drive the dollar even lower, helping to support oil prices
Natural gas
Natural gas prices on Tuesday felt the effect returning from the three day holiday weekend and losing 11.7 HDDs of demand (CWG). Weather models turned warmer, and the selling has continued on Wednesday morning
The February gas contract is down another 2.5% as of Wednesday morning as weather forecasts again shift mostly warmer
The Commodity Weather Group showed a 4.2 HDD loss for the past 24 hours with warm anomalies focused on the Central and Southeast portions of the Lower 48
The U.S. Federal Energy Regulatory Commission (FERC) denied Pembina Pipeline, the company proposing the Jordan Cove LNG export terminal, a federal permit that would let the project past an Oregon agency’s denial of Clean Water Act certification
The LNG facility would be the only such facility on the West Coast of the Lower-48 states
Jordan Cove LNG plant would be able to liquefy up to just over 1 Bcf/d for gas export
The long challenged Mountain Valley Pipeline (MVP) received another setback yesterday after FERC voted 2-2 on whether to advance the project
A favorable ruling would have allowed the pipeline to put the first 77 miles into service while work remains on the remaining 226 miles (Roanoke Times)
MVP is designed to transport 2 Bcf/d from locations in Appalachia to market in the Mid-Atlantic
AEGIS notes that Appalachian producers need the pipe in-order to grow beyond the current region’s production levels
Oil:
President-elect Biden will cancel the Keystone Pipeline using an executive order during his first day in office
Biden has said that the pipeline does not serve the “U.S. national interest,” and onlookers expect the executive order will stick
AEGIS notes that while the move may harm Canadian producers, U.S. producers will likely benefit from the reduced supplies from the Alberta oil sands and the price response. Dumb because moving oil via pipeline is the safest way to transport it.
U.S. Treasury Secretary Janet Yellen calls on lawmakers to “act big” on additional coronavirus relief spending
At her confirmation hearing on Tuesday, Yellen said the benefits of a big stimulus package to counter the coronavirus pandemic were greater than the expenses of a higher debt burden
The dollar slipped by 21 pips from its one-month high of $90.765 to $90.54 on Wednesday
The new stimulus package is likely to affect oil prices on two fronts. The first being that the additional income could help spur consumer spending. Additionally, the increased fiscal spending will likely drive the dollar even lower, helping to support oil prices
Natural gas
Natural gas prices on Tuesday felt the effect returning from the three day holiday weekend and losing 11.7 HDDs of demand (CWG). Weather models turned warmer, and the selling has continued on Wednesday morning
The February gas contract is down another 2.5% as of Wednesday morning as weather forecasts again shift mostly warmer
The Commodity Weather Group showed a 4.2 HDD loss for the past 24 hours with warm anomalies focused on the Central and Southeast portions of the Lower 48
The U.S. Federal Energy Regulatory Commission (FERC) denied Pembina Pipeline, the company proposing the Jordan Cove LNG export terminal, a federal permit that would let the project past an Oregon agency’s denial of Clean Water Act certification
The LNG facility would be the only such facility on the West Coast of the Lower-48 states
Jordan Cove LNG plant would be able to liquefy up to just over 1 Bcf/d for gas export
The long challenged Mountain Valley Pipeline (MVP) received another setback yesterday after FERC voted 2-2 on whether to advance the project
A favorable ruling would have allowed the pipeline to put the first 77 miles into service while work remains on the remaining 226 miles (Roanoke Times)
MVP is designed to transport 2 Bcf/d from locations in Appalachia to market in the Mid-Atlantic
AEGIS notes that Appalachian producers need the pipe in-order to grow beyond the current region’s production levels
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group