Oil Price is the highest since July - Sept 15

[dan_s]

Closing Prices:
> WTI prompt month (OCT 21) was up $2.15 on the day, to settle at $72.61/Bbl. < My use of $75/bbl for Q4 might be reasonable. GS still says Brent will average $80/bbl in Q4, which would take WTI to $77 or $78.
> NG prompt month (OCT 21) was up $0.200 on the day, to settle at $5.460/MMBtu.

Note that I received from JP Morgan Equity Research Team this afternoon. My comments are in blue.
> We believe the path of least resistance for natural gas prices is higher near-term given global demand and the current supply levels, though we are leery of making a bullish call for 2022 natural gas prices before the winter season kicks off. < Most of the Wall Street Gang is using $3.00 or lower for 2022 to come up with their stock price target.
> At current gas prices, most of the gas-to-coal switching has played out and while there could be some moderate downside risk to industrial demand at these price levels, we don’t foresee anything that would materially impact the supply-demand balances.
> Through the remaining months of the shoulder season (Sept-Oct), we view the biggest downside risk to natural gas prices as a hurricane that leaves a portion of US LNG export capacity offline for a period of time. < It would take a CAT 4 or 5 hurricane making a direct hit on LNG export facilities to take them offline for an extended period. Very low risk of that happening.
> As we move into the winter months, warmer than normal weather could put a damper on the natural gas trade, though a colder than expected winter could leave the US in a position where exports are needed to be “priced out”, which could mean SIGNIFICANT UPSIDE to the winter gas prices from already elevated levels. < It will take ngas prices over $10 to price out LNG exports and I think Europe will pay up to $30 this winter to get LNG cargos since they are extremely short ngas heading into winter.
> Based on recent winter residential & commercial space heating demand we estimate the difference between a warmer or colder than average winter to be ~500 Bcf in end of March storage volumes. < If end of March storage is below a TCF we will have $4.00 or higher ngas prices all of 2022.
> The companies that JP Morgan recommended in the note are COG (soon to merge with XEC), RRC, AR, SWN, EQT and GPOR.

[dan_s]

Go here and scroll down to watch the CME Groups daily analysis of the oil price move.
https://www.cmegroup.com/markets/energy ... l-gas.html