Q3 is off to a great start!
Opening Prices:
> WTI is up $1.92 to $75.39/Bbl, and Brent is up $1.64 to $76.26/Bbl.
> Natural gas is up 6.2c to $3.712/MMBtu.
AEGIS Notes
Crude Oil
Saudi Arabia, Russia reaches tentative deal to return output in the coming months gradually
Negotiations are still underway; However, according to Bloomberg, the current proposal being discussed would return 2 MMBbl/d to the global oil markets from August through December
According to Bloomberg, the implementation of the agreement is conditional on the status of talks between the U.S. and Iran
The full Ministerial Meeting takes place today, where we will learn the cartel's final decision
India's gasoline consumption is at 90% of its pre-COVID levels as demand stages a comeback
Avg. daily sales of transportations fuels expanded by over 20% in June as the country recovered from a devastation COVID resurgence in April and May
Gasoline consumption is only down about 10% from June 2019, while diesel consumption is down 18%
U.S. crude stockpiles are being depleted at a record pace
The EIA reported a 6.7 MMBbl drawdown in inventories during the week ending June 25
Over the last four weeks, stocks have fallen at an average rate of 1.15 MMBbl/d, marking the highest average rate on a four-week rolling basis going back to 1982
Natural Gas
Natural Gas is up 6c to $3.71 following pipeline outages and lower production, which caused prices to spike to $3.814 before eventually retreating
Several pipelines declared force majeure on 6/30 as a result of a Markwest Energy Partners compressor failure
Pipelines affected are Columbia Gas (2.4 Bcf) Rover (840 MMcf) and Equitrans (400 MMcf) as all 3 have gone down to zero nominations for July 1, equaling outages up to ~3.5 Bcf according to PointLogic data
LNG prices are at multi-year highs, as JKM prices are highest for this time of the year since 2013 (Reuters)
JKM prices for August delivery settled at $13.110, while TTF hit $12.048 < This will keep demand for U.S. LNG high all summer, so the chance of ngas storage getting back to the 5-year average before the beginning of the next winter heating season is 0%. My guess is that storage will be over 200 Bcf below the 5-year average in November and the deficit could be double that if we continue to see a hot summer.
Oil & Gas Prices - July 1
Oil & Gas Prices - July 1
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - July 1
Closing Prices:
> WTI prompt month (AUG 21) was up $1.76 on the day, to settle at $75.23/Bbl.
> NG prompt month (AUG 21) was up $0.011 on the day, to settle at $3.661/MMBtu.
At the beginning of the year, my oil & gas price forecasts (assuming an end to the pandemic) was for WTI to average $65/bbl in Q3, with $60 sometime in July and $70 sometime in September. My natural gas price forecast was $3.00 ngas in Q3 and $3.10 in Q4. At the closing prices above our Sweet 16 and Small-Cap Growth Portfolio companies have a lot more upside. Plus, I think there is ~50% chance that we see WTI move over $100/bbl before the end of this year and we could see ngas over $4.00 by the end of this quarter and $5.00 by year-end.
> WTI prompt month (AUG 21) was up $1.76 on the day, to settle at $75.23/Bbl.
> NG prompt month (AUG 21) was up $0.011 on the day, to settle at $3.661/MMBtu.
At the beginning of the year, my oil & gas price forecasts (assuming an end to the pandemic) was for WTI to average $65/bbl in Q3, with $60 sometime in July and $70 sometime in September. My natural gas price forecast was $3.00 ngas in Q3 and $3.10 in Q4. At the closing prices above our Sweet 16 and Small-Cap Growth Portfolio companies have a lot more upside. Plus, I think there is ~50% chance that we see WTI move over $100/bbl before the end of this year and we could see ngas over $4.00 by the end of this quarter and $5.00 by year-end.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group