Opening Prices:
> WTI is down $1.38 to $70.59/Bbl, and Brent is down $1.26 to $74.08/Bbl.
> Natural gas is flat at $5.105/MMBtu.
AEGIS Notes
Oil
WTI is trading down near $70/Bbl with a broader selloff in equities and a rise in the dollar
> Equity futures plunged nearly 2% amid concerns over property developer China Evergrande Group (WSJ)
> The U.S. dollar gained ahead of a Federal Reserve meeting that’s expected to see stimulus scaled back (Bloomberg)
Traders increasingly believe China’s government will let Evergrande fail (WSJ)
Evergrande’s debt burden is the largest for any publicly traded real estate management or development company in the world
It is becoming clear that Europe and possibly the U.S. will not have enough natural gas supply to make it through a colder than normal winter.
The crude market wouldn’t be able to absorb widespread replacement of pricy natural gas with oil in the power and industrial sectors in case of a cold winter, Goldman Sachs analysts said in a note Sunday (Bloomberg, GS)
The potential for gas-to-oil substitution could reach as much as 1.35 MMBbl/d in power and 0.6 MMBbl/d in the industry in Asia and Europe
“Such a large demand boost would prove too large for the oil market to absorb, leading to a spike in prices to in turn achieve oil demand destruction.”
Natural Gas
An estimated 765.5 Mcf/d, or 34.4%, of natural gas production remained offline as of Friday September 17, according to the US Bureau of Safety and Environmental Enforcement
Producers had been waiting for electricity that had been disrupted in downstream facilities from Hurricane Nicholas to come online before restoring production
While there is still no official timeline, Freeport LNG appears to be taking the next steps towards bringing its facility back online (S&P Global)
Freeport told the Texas Commission on Environmental Quality that it would be venting the liquefaction flare, which is common for restarting LNG trains
U.S. LNG feedgas flows have recovered above 10.0 Bcf/d since Hurricane Nicholas knocked out power along the Gulf Coast
Oil & Gas Prices - Sept 20
Oil & Gas Prices - Sept 20
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Sept 20
High natural gas prices in Europe and Asia will cause some industrial users to shut down.
On September 16, Bloomberg reported that Europe’s energy crunch has forced a major fertilizer maker to shut down two U.K. plants, the first sign that a record rally in gas and power prices is threatening to slow the region’s economic recovery. CF Industries Holdings Inc. (CF-NC) said Wednesday it’s halting operations at its Billingham and Ince manufacturing complexes due to high natural gas prices, with no estimate for when production will resume.
On September 16, Bloomberg reported that Europe’s energy crunch has forced a major fertilizer maker to shut down two U.K. plants, the first sign that a record rally in gas and power prices is threatening to slow the region’s economic recovery. CF Industries Holdings Inc. (CF-NC) said Wednesday it’s halting operations at its Billingham and Ince manufacturing complexes due to high natural gas prices, with no estimate for when production will resume.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Sept 20
Closing Prices:
> WTI prompt month (OCT 21) was down $1.68 on the day, to settle at $70.29/Bbl.
> Also, NG prompt month (OCT 21) was down $0.120 on the day, to settle at $4.985/MMBtu.
AEGIS Notes: "China property worries roil markets"
> WTI prompt month (OCT 21) was down $1.68 on the day, to settle at $70.29/Bbl.
> Also, NG prompt month (OCT 21) was down $0.120 on the day, to settle at $4.985/MMBtu.
AEGIS Notes: "China property worries roil markets"
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group