Oil & Gas Prices - Apr 1

[dan_s]

Opening Prices:
> WTI is down $0.61 to $99.67/bbl, and Brent is down $3.51 to $104.40/bbl.
> Natural gas is down -10.9c to $5.533/MMBtu.

AEGIS Notes
Oil

West Texas Intermediate dipped below $100/Bbl as the U.S. plans to release 1 MMBbl/d for six months from the SPR
> President Biden said he expects allies will also agree to release more oil from their own reserves
> If prices hold at current levels, oil will have its biggest weekly loss in almost two years

Goldman Sachs cut its Brent crude price forecast by $10/Bbl to $125 for the second half of this year (Bloomberg)
> The bank increased its 2023 estimate by $5 to $115/Bbl
> “Fundamental uncertainty will remain extremely high in coming weeks and months, we reiterate our conviction for higher oil prices,” analysts Damien Courvalin and Jeffrey Curry said in a note to clients. “We don’t see today’s decision (SPR release) as resolving oil’s structural deficit, now years in the making.” (Goldman)
MY TAKE: Think of the SPR as our "Savings Account" and commercial oil inventories as our "Checking Account" that runs our very important petroleum inventory. Draining your saving account to pay for day-to-day expenses is a bad sign. Our current administration has caused the structural problem and Russia's invasion of Ukraine makes it worse and puts a spotlight Team Bidens lack of industry knowledge.

Natural Gas

Two U.S. liquefied natural gas (LNG) companies took major steps toward launching new projects
> Developers, Sempra Energy, and New Fortress Energy advanced agreements on two separate projects
> These plants typically require long-term offtake agreements and take years to complete. Still, the New Fortress facility could be up and running in as soon as 12 months
> Last week, the Biden administration said the U.S. would aim to supply European buyers this year with an additional 15 bcm (530 Bcf) of LNG, and 50 bcm (1,750 Bcf) by 2030 to replace Russian gas imports to Europe

The EIA reported the first natural gas injection of the season for the week ending March 25
> The Summer '22 strip continued to rise through yesterday's trading session, despite the early injection, which was one week earlier than normal
> The EIA reported a 26-Bcf injection, in contrast with the five-year average withdrawal of 23 Bcf
> Working gas inventories increased to 1.415 Tcf for the week ended March 25, EIA data showed.
> Storage volumes are now 347 Bcf, or 20%, below the year-ago level of 1.762 Tcf and 244 Bcf, or 15%, below the five-year average of 1.659 Tcf
> S&P Global expects a 15-Bcf draw for the week ending April 1

[dan_s]

Closing Prices
> Prompt-Month WTI (May 22) was down $-1.01 on the day, to settle at $99.27
> Prompt-Month Henry Hub (May 22) was up $0.078 on the day, to settle at $5.720

The gas price is way over what I am using in my forecast model.

All of my models are based on $90/bbl WTI and $4.25/MMBtu for HH gas for Q1, so Q1 results should beat my forecasts.