Oil & Gas Prices - Feb 3

[dan_s]

Opening Prices:
> WTI is up 66c to $55.42/Bbl, and Brent is up 70c to $58.16/Bbl.
> Natural gas is down 0.9c to $2.836/MMBtu.

Aegis Morning Notes
Crude Oil

Oil is trading at its highest levels in over a year, breaching the $55/Bbl mark
Prices strengthened further following an American Petroleum Institute (API) reported build of 4.3 MMBbls. The EIA is set to release last week’s numbers at 9:30 am

Strong exports to Asia have helped push prices higher, particularly as demand slows down elsewhere. The U.S.’s largest export terminal reached a record-level for exports in January
American oil exports from U.S. Supertanker Port off Louisiana Port reach new record-high
Eight vessels departed from the port in January carrying a total of 15 MMBbls of crude from the U.S. to South Korea, China, and India
Total U.S. Gulf crude flows to Asia reached nearly 51 MMBbls in January

China’s crude inventory levels reach one-year low as global stockpiles continue to shrink
Chinese inventories declined for the seventh consecutive week, dropping to 990 MMBbls, according to Bloomberg
China reduced inventories by a record amount in December while also importing less crude, according to Government data

EIA weekly data is due at 9:30 am CST. Below are what the Wall Street Gang expects.
U.S. Crude Inventories: – 971 MBbls (Avg. Bloomberg surveys)
U.S. Gasoline Inventories: + 914 MBbls
U.S. Distillate Inventories: – 246 MBbls
U.S. Refinery Utilization: – 0.02% change

Natural Gas

Natural gas briefly traded at $3.00/MMBtu early yesterday morning, but mid-day weather models moderated to a milder forecast and Nymex gave up all gains to settle mostly unchanged
Overnight weather model runs showed only minor changes as only 2.1 HDDs were lost

Stocks of natural gas in the U.S. likely fell by the largest amount of the season in the week ended January 29 as cooler weather hit the Midwest and East
The EIA is expected to report a 191 Bcf withdrawal from storage on Thursday, according to the average Bloomberg consensus estimate
A 191 Bcf pull would be nearly 40 Bcf more than the 155 Bcf withdrawal observed last year as well as the five-year average draw of 146 Bcf
If the estimate is correct, gas in underground storage would decrease to 2.686 Tcf. That would reduce the overhang to 2020 to only 38 Bcf

President Biden’s new energy secretary nominee Jennifer Granholm is hinting that that new administration will be supportive of U.S. LNG exports (Bloomberg)
“I believe U.S. LNG exports can have an important role to play in reducing international consumption of fuels that have greater contribution to greenhouse gas emissions,” she writes
Granholm supports LNG but also wants the gas sector to get cleaner too – which could be a reference to flaring

[dan_s]

If this weather forecast is accurate the week ending Feb 12 will probably be a draw from natural gas storage of ~250 BCF.
https://weather.com/news/weather/video/ ... is-weekend

"Paradigm Shifts" can cause BIG changes in the price of U.S. natural gas. If gas in storage goes below the 5-year average it will be a big paradigm shift.

[dan_s]

Closing Prices:
> WTI prompt month (MAR 21) was up $0.93 on the day, to settle at $55.69/Bbl. < Goldman Sachs has caused all of the Wall Street Gang to raise their oil price forecasts. Bulls are in charge.
> NG prompt month (MAR 21) was down $0.056 on the day, to settle at $2.789/MMBtu < Some very bullish weather is coming next week.