Oil & Gas Prices - Nov 23

[dan_s]

Opening Prices:
> WTI is down $3.09 to $77.86/bbl, and Brent is down $3.38 to $84.98/bbl.
> Natural gas is up 57.1c to $7.35/MMBtu. < moving up to $7.49 at the time of this post.

AEGIS Notes
Oil

West Texas Intermediate fell below $80/Bbl on Wednesday as G7 nations continue to discuss a price cap on Russian oil
> Price cap proponents are discussing range of oil prices around $65-$70, according to European officials (Reuters)
> A senior U.S. Treasury official said that the price cap will likely be adjusted a few times a year
> Russia has previously said that it won’t sell oil to nations that use the cap
MY TAKE: The G7 is a bunch of idiots that are going to make the energy crisis worse. The "price cap" is just going to be a "price floor". It will do nothing but lower petroleum fuel supplies.

The American Petroleum Institute (API) reported that U.S. crude inventories decreased 4.8 MMBbl last week
> The industry group showed a small draw of 400 MBbl in gasoline stocks and a 1.1 MMBbl build in distillate stocks
> More closely followed government data is due out at 9:30 am CST as most analysts are focused on the status of distillate stocks
> A survey of economist from Bloomberg is indicating a 163 MBbl build in distillates

Natural Gas

Natural gas prices are up 9.5% this morning to $7.44, in the prompt month < JAN23 NYMEX contract now at $7.94
> The Summer ’23 seasonal strip is higher by 28 cents to $5.33, and the Winter ‘23/’24 strip is up 23 cents to $5.72
> Weather forecasts have shifted cooler, with the Lower 48 1–15-day forecast falling by 9 °F
> Most of the change is concentrated in the 11-15 day period, in which the Midwest forecast fell by 19 °F, and the South Central by 20 °F
> The EIA is releasing its weekly inventory report a day early because of the Thanksgiving holiday. The Bloomberg avg. survey shows a withdrawal of -88 Bcf for the week ending November 18, which would mark the first withdrawal of the season

European gas price cap proposed (Reuters)
> The proposed price cap would limit prices at the Dutch TTF hub to not exceed 275 euros per MWh, or 58 euros higher than an LNG reference price
> The proposal has not been agreed to yet, and some EU countries disagree with the implementation of the price cap
> The Prime Minister of Poland said that the proposed price level was too high, other diplomats also warned that the cap was too high to be effective
Just more political BS

FERC says GTN pipeline expansion would have limited environmental impact (S&P)
> The GTN pipeline transports gas from Western Canada to Idaho, Washington, Oregon, and the border of California
> The expansion plan calls for the upgrade of three compressor stations which would add a total of 50,980 horsepower of compression
An expansion of the GTN pipeline system would enable more gas to be imported from Canada and reduce constraints in the region

[dan_s]

Closing Prices:
> Prompt-Month WTI (Jan 23) was down $-3.01 on the day, to settle at $77.94.
> Prompt-Month Henry Hub (Dec 22) was up $0.529 on the day, to settle at $7.308.

Oil prices have a history of declining right before Thanksgiving and they moving higher into year-end. When the SPR draws end, I think WTI will move up to $100/bbl within two months.

Read this: https://oilprice.com/Energy/Crude-Oil/D ... r-Oil.html