Oil & Gas Prices - Dec 10

[dan_s]

Opening Prices:
> WTI is up $1.23 to $72.17/Bbl, and Brent is up $1.14 to $75.56/Bbl.
> Natural gas is up 2.9c to $3.843/MMBtu.

AEGIS Notes
Oil

Oil is set for its biggest weekly gain in more than three months after worst-case fears over the Omicron variant receded
> West Texas Intermediate rose over 7% this week
> Omicron fears are not totally removed as traders weigh rising cases and renewed restrictions by some governments to contain the spread

The Biden White House is not considering a crude oil export ban, a source with the administration said Thursday (Reuters)
> Lawmakers of both republicans and democrats urged Biden in a letter not to halt exports as doing so would not help lower gasoline costs
> Brian Deese, director of the National Economic Council, told reporters on Thursday that banning oil exports is “not an issue we are currently focused on.”
MY TAKE: Oil prices are set by the global market. Banning the export of U.S. ultra-light oil produced from the shale plays would like raise gasoline and diesel prices.

Natural Gas

The prompt-month natural gas contract is nearly unchanged this morning at $3.843
> Futures are on track for their second consecutive weekly loss as weather models have continued to disappoint
> The December gas-weighted heating degree day forecast fell by 46.1 HDDs (6%) on the week, to 724 HDDs, from 770 last Friday
> The heating degree day total decreased each day this week except for Wednesday, which has sent gas 31.8c or 7.7% lower
> This week, production has fallen, but it has done little to support prices. According to Bloomberg, lower-48 dry gas production is down by 1.7 Bcf/d week-over-week
> LNG feedgas demand also fluctuated with large swings in gas deliveries to Sabine Pass and Freeport LNG. Flows to LNG facilities have not been able to reach their record high of 12.466 on November 26 but have come close several times
> Cheniere LNG announced its first export cargo from its Sabine Pass Train-6

The EIA reported a 59-Bcf draw for the second consecutive week
> The pull on inventories was more than the five-year average of 55 Bcf but weaker than last year’s 78 Bcf pull in the corresponding week
> Working gas inventories decreased to 3.505 Tcf. US storage volumes stand 356 Bcf, or 9.2%, less than the year-ago level of 3.861 Tcf and 90 Bcf, or 2.5%, less than the five-year average of 3.595 Tcf
> The draw was in between analysts' estimates of -47 Bcf to -62 Bcf
> The ICE end-of-season storage number lost 5 Bcf to 1.61 Tcf