Oil & Gas Prices - May 5

[dan_s]

Opening Prices:
> WTI is up $1.40 to $109.21/bbl, and Brent is up $1.76 to $111.90/bbl.
> Natural gas is up 6.6c to $8.481/MMBtu.

AEGIS Notes: "First Look - WTI trades higher | Distillate stocks at a 14-year low | Gas up ahead of storage report"

Oil

WTI rose to $109.21 after the EU's proposal to ban Russian Crude
> The embargo on Russian Oil would result in a 1.0 to 1.5 million b/d shortfall by the end of the year, according to JPMorgan
> OPEC+ agrees to a modest 432,000 b/d quota increase in June < Meaningless since OPEC+ has not come close to their quotas for 7 months in a row.

The EIA recorded a 1.3 million barrel crude oil build last week, with a 1.4 million barrel build at Cushing, OK
> The draws for gasoline and distillate were 2.2 million barrels and 2.3 million barrels, respectively
> Diesel inventories on the East Coast fell to a historic low of 9.1 million barrels
> Total distillate stockpiles declined to 105 million barrels; a fresh 14-year low

United States Federal Reserve raised rates by 50 basis points and signaled further significant rate hikes ahead
> 10-year Treasury yields dropped from 2.96 % to 2.93 %. It had initially risen to 3.01 % until Powell's new remarks
> The Fed's key rate was raised to a range of 0.75 % to 1%, the highest level since the pandemic struck

Natural Gas

Natural gas futures have continued to rally, for their fifth consecutive day
> The prompt-month (Jun' 22) gas contract is up by 6.6c this morning, near $8.481
> Lower-48 dry gas production is steady at around 92.9 Bcf/d
> LNG feedgas demand is at around 12.2 Bcf/d
> Calcasieu Pass feedgas volumes are holding near their record-high of 1 Bcf/d

The EIA is expected to report an injection of 67 Bcf for the week ending April 29 (Platts)
> Responses to the survey ranged from 41 Bcf to 81 Bcf
> It would also contrast the five-year average injection of 78 Bcf, and the 53 Bcf addition reported during the corresponding week in 2021
> Current inventory levels would rise to 1.557 Tcf, while the deficit to last year would expand to 418 Bcf, and the deficit to the five-year average would expand to 395 Bcf

[dan_s]

Closing Prices:
> Prompt-Month WTI (Jun 22) was up $0.45 on the day, to settle at $108.26 < My forecast/valuation models are using $100/bbl WTI for Q2
> Prompt-Month Henry Hub (Jun 22) was up $0.368 on the day, to settle at $8.783 < My forecast/valuation models are using $6.00/mcf HH for Q2.