Oil & Gas Prices - Jan 10

[dan_s]

Opening Prices:
>WTI is down 21c to $78.69/Bbl, and Brent is down 19c to $81.56/Bbl.
> Natural gas is up 24.1c to $4.157/MMBtu.

Brent and WTI crude fluctuated between gains and losses Monday morning as some supply from Libya and Kazakhstan returned
Brent traded just shy of $82/Bbl following the biggest weekly gain in a month
Money managers increased their net-long positions in Brent to a six-week high last week

Libyan production increased to 900 MBbl/d after pipeline maintenance was complete (Bloomberg)
Libya’s oil production was between 1.1-1.2 MMBbl/d as recent as November
Some oil output was restored in Kazakhstan following widespread protests
AEGIS notes a handful of global supply outages have been the driver of the oil price rally

Natural gas

Natural gas is up 24.1c, to trade near $4.157/MMBtu this morning
Weekend weather models were encouraging and showed a pickup in cooler weather for January. The gas-weighted heating degree day total forecast for January increased by 22.4 HDDs to 967.6 HDDs
Production nominations still indicate that production is down, with weak Appalachian performance dampening the broader recovery. According to Criterion Research, U.S. lower-48 dry gas production is at around 92.0 – 92.5 Bcf/d

U.S. natural gas stocks have normalized and returned to the five-year average
The exceptional mild start to the heating season and high price, which have encouraged more coal-fired power generation
Inventories depleted much slower than usual during the final two months of the year, erasing the deficit that accumulated between March and September, which lowered spot prices and calendar spreads
The March-April spread, a proxy for the probability of a shortage of gas before winter ends, has retreated from $1.80 to just above 5c
The warm weather has left the U.S. with enough gas to become the world’s largest exporter in December