Oil & Gas Prices - Sept 14

[dan_s]

Other than having to sit up with my two dogs for a few hours, we made it thru Tropical Storm Nickolas. Lots of tree limbs down but now damage to the house. I hope all of you made it thru the storm OK. Sounds like power is out is several areas.

Opening Prices:
> WTI is up 49c to $70.94/Bbl, and Brent is up 55c to $74.06/Bbl.
> Natural gas is up 8.7c to $5.318/MMBtu.

AEGIS Notes
Oil

West Texas Intermediate remained above $70/Bbl Tuesday morning as another storm spins through the Gulf of Mexico
About 44% of crude oil capacity in the Gulf remains offline two weeks after Hurricane Ida made landfall

The IEA says the world must wait for additional oil supplies

Consumers should have been enjoying “solid gains” in production as OPEC+ continued to bring back idle capacity, the IEA said in its monthly report (Bloomberg)
“Unplanned production outages have temporarily halted an uptrend in world oil supply that began in March, but growth is not set to resume until October,” said the IEA
The Paris-based agency said it won’t be until early 2022 that supply will be high enough to allow builds in oil stocks < In other words, OECD oil inventories will continue to fall.
Releases from China’s strategic oil stocks may help “plug the gap” in the meantime

Natural Gas

Tropical Storm Nicholas, which was downgraded from a hurricane early Tuesday morning, makes landfall near Houston, Texas, as power outages ensue across the region
According to CenterPoint Energy's outage tracker, 432,547 customers, or roughly 17% of CenterPoint's power customers in the Houston area, were without electricity as of Tuesday morning and an additional 38k further down the Gulf-based on Texas-New Mexico Power’s Power Outage Map

All four LNG export facilities along the Gulf remained in service early Tuesday morning (Reuters, Refinitiv)
LNG spot prices rise to seasonal highs as buyers worldwide compete for cargoes in a tight market ahead of withdrawal season (Reuters) < The "Mother of all Bidding Wars" is global.
> Prices for Dutch benchmark TTF ended at $21.456 for October delivery, up 290% since their low this year of $5.508 on March 3
> Meanwhile, Asian benchmark JKM ended at $18.820 for October delivery, up 224% since their low this year of $5.805 on February 25
In August, LNG cargoes were split 76.3% for Asia and 16.4% for Europe
The U.S. lost one gas-directed rig last week, with the Marcellus losing two and Other basins gaining 1. This brings the rigs drilling for natural gas count down 1 W-o-W to 101 and up 23 based on the same week last year < So far, the upstream "gassers" have not increased their drilling budgets.