Oil & Gas Prices - Sept 1

[dan_s]

Opening Prices:
> WTI is up 31c to $68.81/Bbl, and Brent is up 32c to $71.95/Bbl.
> Natural gas is up 6.1c to $4.438/MMBtu.

AEGIS Notes
Oil

Oil prices remain steady ahead of today’s OPEC+ meeting that is likely to result in a further rise in supply
> OPEC and its allies are expected to confirm a plan to pump an additional 400 MBbl/d in October
> Producers and refineries are still assessing the impact on operations after the passage of Ida

The U.S.’s largest base supporting the Gulf of Mexico offshore oil industry will take weeks to recover from Ida’s destruction (Bloomberg)
> Chett Chiasson, executive director of the Great Lafourche Port Commission, told National Public Radio on Tuesday, “How many weeks is a good question” and “We have a long road ahead of us, and there’s a lot of damage for us to assess and try to recover from.”
> Port Fourchon port commission spokesman Thad Angelloz told Platts that there was damage to the port’s facilities, but it looks like a lot of key infrastructures remain and seems to have stood up well to the category four hurricane
> According to BSEE, 93.69%, or 1.7 MMBbl/d of oil production remains offline in the gulf
> AEGIS notes that with mostly flat price action in WTI, traders are likely uncertain whether the reduction in supply offsets the downstream demand outages at the moment < Most of the refineries should be back up and running soon after they get electricity restored. With Hurricane Harvey it was extensive flooding that caused the refineries to stay offline for over a month. Gasoline and diesel inventories were below the 5-year average before the storm arrived and they will go a lot lower.

EIA crude oil inventory data weekly survey
Bloomberg Survey
U.S. Crude oil inventories: -2,926 MMBbl/d
U.S. Gasoline inventories: -1,368 MMBbl/d
U.S. Distillate inventory: -809 MMBbl/d
Refinery utilization (change): -0.35%

Natural Gas

The prompt-month (Oct ’21) gas contract is up 6.1c at $4.438 this morning
> 47% of Gulf of Mexico dry gas production is still offline
> Bloomberg estimates GOM ngas production is currently around 150 MMcf/d, down from around 2.2 Bcf/d before Hurricane Ida
> On the demand side, Cheniere’s Sabine Pass LNG export facility sustained no damage during the storm.
> However, there are still nearly 1 million homes without electricity, so natural gas demand for power generation is down.

Williams co. declares force majeure on its Discovery Gas Transmission line that brings GoM gas to Louisiana
> The company cited “downstream constraints as a result of Hurricane Ida” as the cause for the declaration
> The notice was issued on Tuesday at 2:48 pm. A timeline has not been released, but all flows through the pipeline have stopped (avg. 350 MMcf/d)

[dan_s]

Closing Prices:
> WTI prompt month (OCT 21) was up $0.09 on the day, to settle at $68.59/Bbl. < Big reversal after EIA Petroleum Report shows large crude inventory decline.
> NG prompt month (OCT 21) was up $0.238 on the day, to settle at $4.615/MMBtu. < This is why you pay the "Big Bucks" for your EPG membership. I think the "Mother of all Bidding Wars" for natural gas supply is in the first inning.