Oil & Gas Prices - Nov 25

[dan_s]

Opening Prices:
> WTI is up $1.00 to $78.94/bbl, and Brent is up $0.46 to $85.87/bbl.
> Natural gas is down -19.5c to $7.113/MMBtu.

AEGIS Notes
Oil

Brent crude traded above $86/Bbl Friday morning amid thin trading volumes following the US Thanksgiving holiday
> Despite trading higher this morning, oil is on track for a third weekly loss; with Brent down $13/Bbl since November 4
> Worries about the demand outlook for oil continues as China’s daily covid infections climbed to a record high. The country reported nearly 30k new cases for > > Wednesday. China’s zero-tolerance Covid policy has put a dent in oil demand since the pandemic started
MY TAKE: This is flu season, people get sick in the winter, ~1.5 billion people live in China. The number of Covid cases is very small compared to China's population. What we need to know is how many need to be hospitalized and how many are dying. The last I heard was that China had just one Covid death in the last six month. IMO the Chinese government is using FEAR to control the population and just maybe to keep a lid on oil prices since they are the #1 importer of oil.

European diplomats extended oil-price-cap talks among disagreements between members (Bloomberg)
> Poland did not agree with the price of $65/Bbl as they viewed it as too generous to Russia
> On the flip side, Greece, a major player in shipping industry, doesn’t want the price to go below $70
> Interestedly, Moscow appears to be softening its position on how it would react to a price cap. Russia had previously said it would not sell oil to any country participating in the price cap. “Seeing these numbers, we should analyze all this before formulating our position,” Kremlin spokesman Dmitry Peskov told reporters
MY TAKE: This is just more political "noise". The price caps will actually be price floors. They will not take much Russian oil off of the global oil market because China, India and lots of other countries will ignore them. Europe is an oil "price taker" that is no position to dictate the oil price. OPEC+ is now in total control of the world's oil price, thanks to Biden's War on Fossil Fuels.

Natural Gas

Natural gas prices are down 2.5% to $7.12 in the prompt month
> The Summer ’23 strip is down 6 cents to $5.25, and the Winter ‘23/’24 strip is lower by 6 cents to $5.70

If German gas inventories fall below 40%, emergency measures may be implemented (Reuters)
> German regulators said that if gas storage falls below 40% by February 1 that energy rationing would be required
> Inventories are currently at capacity, although storage withdrawals will begin this week < With no gas from Russia, draws will be BIG.
> Germany is hoping to use 25% less energy this winter than last year, to prevent a drawdown of gas inventories

The TTF Dutch-Benchmark price is trading around $39.60, well below its previous all-time highs set earlier this year. Currently, European inventories are well stocked but the lower imports from Russia this winter could lead to some type of supply-scarcity event where higher prices would be needed to curb demand
> The impact of international prices on domestic prices is limited because of the limit on volumes we can actually send overseas

Higher Canadian gas production leading to increased flows into Pacific Northwest (S&P)
> Gas flows from Canada to the US Northwest are up more than 6% from last year's levels, while Canadian production has reached record highs this year
> These flows have made up for a decrease in inflows from Canada to the Rockies region
> Canadian production is up 6% this year, and reached a new record high in November of 17.4 Bcf/d

[dan_s]

Closing Prices:
> Prompt-Month WTI (Jan 23) was down $-1.66 on the day, to settle at $76.28.
> Prompt-Month Henry Hub (Dec 22) was down $-0.284 on the day, to settle at $7.024.

Don't get too excited about this. NYMEX futures trading on a holiday are usually weird.

[Fraser921]

day 10-15 looks interesting

https://www.celsiusenergy.net/p/weather-data.html#box20