Oil & Gas Prices - Sept 8

[dan_s]

Opening Prices:
> WTI is up 95c to $69.30/Bbl, and Brent is up 86c to $72.55/Bbl.
> Natural gas is up 6.4c to $4.632/MMBtu.

AEGIS Notes
Oil

Oil futures in the U.S. climbed above $69/Bbl Wednesday morning amid continued production outages in the Gulf of Mexico
About 80% of Gulf oil production remained shut in on Tuesday

Protesters in Libya have taken control of the nation's largest crude terminal
Demonstrators, calling for the dismissal of Mustafa Sanalla, state-run National Oil Corp.’s chief, have prevented an oil tanker from loading (Bloomberg)
The new wave of protests across the country’s ports threaten to destabilize the OPEC members oil exports
Protestors have also taken control of the Es Sider terminal, which processes 300 MBbl/d

Hurricane Ida’s impact continues to cause distortions among various U.S. crude grades
Mars Blend spread +$1 to +$1.25/Bbl – the strongest since mid-January
Southern Green Canyon spread vs. WTI at Cushing soared $3.25 to $2.25/Bbl on Tuesday vs. Friday – strongest since mind-May 2020
WTS Midland spread +25c to +20c/Bbl – strongest since mid-June
AEGIS notes that the changing crude spreads are likely to be short-lived and return to a more normal relationship with WTI once oil production recovers

Natural Gas

Gas is up 6.4c as weather models tilt warmer
The U.S. gas-weighted cooling degree day count increased by five from 179 to 184
73 Bcf/d or 77.89% of Gulf of Mexico output is still offline following Hurricane Ida
So far, Hurricane Ida has removed 20.8 Bcf of supply

Europe is facing an energy price shock as natural gas, power prices surge to record levels
The country’s natural gas inventory levels are at their lowest in over a decade, and injections have been small as the country has had a difficult time securing gas
Russia is limiting flows to European countries, while Asia is snapping up cargoes that may have otherwise gone to Europe < The "Mother of all Bidding Wars" for gas supply has gone global.
Europe has also faced several supply outages, and domestic output is currently in decline

[Fraser921]

NG $ 5 has been achieved, DEC and Jan hit 5.01 & 5.06 in futures trading

UPDATE 4 months now over $5 Someone is going to have another "ONE TIME WRITE OFF"

I pity the poor slobs that hedged at 2.50

CLR all unhedged, they will exceed the 2.4 b FCF made last earning call

sbow up 13 %

Someone short is blowing up today

Perfect storm:

1. Producers staying disciplined
2. Europe , Asia, US shutting down coal plants
3 Green new deal
4. Demented politicians fighting every pipe/production

Voila Higher prices

[dan_s]

The higher gas price is good even for the companies that have a lot of production hedged.
> All of their production sells in the real world at the physical price. So, they do get that cash.
> The cash settlements on their hedges will be paid based on the difference to the index.
> None of them are 100% hedged.

The "Paper Traders" that shorted NYMEX contracts are the ones getting killed.

This is just the beginning of "The Mother of all Bidding Wars" The gas shortage in Europe is a BIG DEAL.

Nice to see SilverBow Resources (SBOW) getting some love today. It is one of three gassers in our Small-Cap Growth Portfolio. The others are GDP and NOG.

[dan_s]

Closing Prices:
> WTI prompt month (OCT 21) was up $0.95 on the day, to settle at $69.30/Bbl.
> Also, NG prompt month (OCT 21) was up $0.346 on the day, to settle at $4.914/MMBtu. < This is a seven year high!