Opening Prices:
> WTI is up 46c to $71.33/Bbl, and Brent is up 45c to $74.33/Bbl.
> Natural gas is up 9.6c to $3.898/MMBtu.
AEGIS Notes
Oil
Oil prices rose after U.S. stockpiles showed the largest decrease since September, and a more hawkish Fed triggered a broader rally (BBG)
> The S&P 500 settled near an all-time high Wednesday after Fed officials focused their battle against inflation by moving their asset-buying program earlier than expected
> The EIA reported a draw of 4.5 MMBbl for the week ended December 10
The large crude inventory withdrawal was closer to 6.5 MMBbl when SPR releases are removed < So, even with the SPR draws, crude oil inventories continue to fall. The SPR draws come to an end early in 2022, which is why I think oil prices might move a lot higher in Q2 2022.
> Gasoline demand rose to 9.14 MMBbl/d last week, data from the EIA showed. That’s the highest for this time of year since 2015 and suggest concerns about COVID-19 have yet to dent driving demand
> Demand is expected to remain high in the short term as more than 100 million people are expected to get on the road this holiday season, according to AAA
MY TAKE: "The Boy That Cried Wolf" (Dr. Fauci) is drawing less and less attention. The FEAR level of Covid is on decline and most people are going to get back to living normal lives. In other words, each new Covid Variant just goes on the long list of bugs trying to kill us.
Natural Gas
The prompt-month Henry Hub contract (Jan ’22) is up by 9.6c, near $3.89/MMBtu
> The gas-weighted heating degree day forecast for December increased by 3.4 HDDs to 724 HDDs
> Production is down by about 0.47 Bcf/d this morning, near 94.6 Bcf/d
> Wind generation has been very strong this week, hovering between 60-70 GW
> LNG feedgas demand has improved and is up by 0.73 Bcf/d, near 12 Bcf/d
European gas futures continued to rise, with the prompt contract settling at a record-high of $43.682/MMBtu
> Germany regulators announced that there wouldn’t be a decision on the startup of Nord Stream 2 in the first half of next year, saying a timeline of 6-8 months has been outlined
> Gas inventories in Europe are around 66% full, a level typically seen in mid-January, and weather forecasts show below-average temperatures over the next four weeks < Thanks to Miss La Nina
> French power giant EDF said on Wednesday it had found faults on pipes in a safety system at its Civaux nuclear power station, and it would shut down another plant because it used the same kind of reactors. The decisions will result in a loss of about 1 Terawatt-hour by the end of 2021 and boost the regions demand for alternative power fuel sources, like gas
The EIA is expected to report an 88-Bcf withdrawal for the week ending December 10, which would be smaller than the 118-Bcf draw in the corresponding week of last year and the five-year average draw of 114 Bcf
> Analysts estimates ranged from a draw of 75 Bcf to 99 Bcf
> A draw within this range would bring total stocks near 3.417 Tcf and the deficit to the five-year average would narrow to 64 Bcf
> The current end-of-season storage number settled at 1.610 Tcf on ICE
Oil & Gas Prices - Dec 16
Oil & Gas Prices - Dec 16
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Dec 16
Trading Economics:
"WTI crude futures climbed back above $71 per barrel on Thursday, after dipping below $70 in the previous session as US inventory data showed strong consumer demand, with risk-on sentiment returning to the markets post-central bank announcement. The Federal Reserve said it would end pandemic-era asset purchases in March and begin raising interest rates amid low unemployment and high inflation, giving investors some clarity on policy outlook. Meanwhile, official EIA data showed US crude inventories fell by 4.6 million barrels last week, much more than market expectations for a 2.1 million barrel decrease. Crude exports also picked up sharply, while products supplied by refineries, a signal of consumer demand, hit a record 23.2 million barrels per day. On the virus front, the International Energy Agency warned that a surge in Covid cases would dent global oil demand at a time when supply is set to increase, especially in the US."
MY TAKE: Because IEA is based in Paris, all employees must agree with the Global Warming Gang and forecast lower oil demand. Plus, my guess is that FEAR of Covid is much higher in France than it is in Texas.
"WTI crude futures climbed back above $71 per barrel on Thursday, after dipping below $70 in the previous session as US inventory data showed strong consumer demand, with risk-on sentiment returning to the markets post-central bank announcement. The Federal Reserve said it would end pandemic-era asset purchases in March and begin raising interest rates amid low unemployment and high inflation, giving investors some clarity on policy outlook. Meanwhile, official EIA data showed US crude inventories fell by 4.6 million barrels last week, much more than market expectations for a 2.1 million barrel decrease. Crude exports also picked up sharply, while products supplied by refineries, a signal of consumer demand, hit a record 23.2 million barrels per day. On the virus front, the International Energy Agency warned that a surge in Covid cases would dent global oil demand at a time when supply is set to increase, especially in the US."
MY TAKE: Because IEA is based in Paris, all employees must agree with the Global Warming Gang and forecast lower oil demand. Plus, my guess is that FEAR of Covid is much higher in France than it is in Texas.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Dec 16
LONDON, Dec 16 (Reuters) - U.S. petroleum inventories are well below their normal seasonal level and have continued sliding in recent weeks - supporting oil prices despite fears about the impact of Omicron on the economy and travel.
The major statistical agencies all predict the global oil market will move into surplus from this month or next, but inventories will start building from an unusually low level, which is unlikely to put downward pressure on prices.
Total U.S. inventories of crude and products outside the strategic petroleum reserve are at the lowest seasonal level since 2014, according to weekly data from the U.S. Energy Information Administration.
------------------------
As I pointed out on today's live webinar: OECD oil inventories were 243 million barrels below the 5-year average on October 31st and expected to continue falling through year-end. Ignoring the fact that OECD countries consume more oil than they did 5 years ago, even if global oil supply does exceed demand in Q1 (still questionable) by 2 million bpd, it won't be enough to get OECD inventories back to normal. Plus, IEA has a long history of under-stating oil demand.
The major statistical agencies all predict the global oil market will move into surplus from this month or next, but inventories will start building from an unusually low level, which is unlikely to put downward pressure on prices.
Total U.S. inventories of crude and products outside the strategic petroleum reserve are at the lowest seasonal level since 2014, according to weekly data from the U.S. Energy Information Administration.
------------------------
As I pointed out on today's live webinar: OECD oil inventories were 243 million barrels below the 5-year average on October 31st and expected to continue falling through year-end. Ignoring the fact that OECD countries consume more oil than they did 5 years ago, even if global oil supply does exceed demand in Q1 (still questionable) by 2 million bpd, it won't be enough to get OECD inventories back to normal. Plus, IEA has a long history of under-stating oil demand.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group