Oil & Gas Prices - Dec 30

[dan_s]

Opening Prices:
> WTI is down $0.28 to $78.12/bbl, and Brent is down $0.23 to $83.23/bbl.
> Natural gas is down -10.7c to $4.452/MMBtu.

AEGIS Notes
Oil

At the time of this post (on very light trading volume) WTI was up $0.78 to $79.18.

Oil heads for a second consecutive yearly gain
> Feb ’23 WTI lost nearly 30c this morning to trade around $78/Bbl
> This week's price action was choppy due to low liquidity in the market
> WTI is on track to gain nearly $3/Bbl, or 4.5%, after rising 55% in 2021 and Brent looked set to gain $5/Bbl, or 7%, after rising 50% in 2021

Expectations of demand recovery have increased after China abandoned its Covid-zero policy
> However, concerns about whether the country can sustain the eased restrictions persist amid surging Covid cases
> AEGIS continues to monitor Russia’s response to the price cap imposed by the EU-G7, as well as further rate hikes by the Fed

Keystone pipeline returns to service after 21 days of outage (BBG)
> "The Keystone Pipeline System is now operational to all delivery points," said TC Energy in a statement, while operating "with additional risk-mitigation measures, including reduced operating pressures"
> The pipeline carries 622,000 Bbl/d of crude between oil fields in Canada and the U.S. Gulf Coast

Natural Gas

Natural gas is set to finish the week at the lowest level in over six months, trading around $4.45
> Yesterday the EIA reported a storage withdrawal of 213 Bcf, which has been the largest withdrawal of the season so far and the largest December draw in more than ten years.
> This withdrawal was 108 Bcf larger than the five-year average injection for this time of year
> This storage withdrawal was also larger than the market anticipated, with the Bloomberg survey indicating a median expected withdrawal of 198 Bcf

Gas production has mostly recovered from the freeze-offs, with production up to 99 Bcf/d, from last week's low of 82 Bcf/d, according to data from IHS

Venture Global looking to speed up the construction of Plaquemines LNG (S&P)
> The company said that they will need to increase the workforce to finish construction by December 2025 due to weather-related delays, although they have not said if the delays will affect the initial startup date in 2024
> Venture Global has submitted a request to FERC to increase their peak workers per day from 3,600 to 6,000
> The facility is expected to have a capacity of 2.6 Bcf/d and will be located along the Gulf Coast, south of New Orleans

[dan_s]

Closing Prices for 2022:
> Prompt-Month WTI (Feb 23) was up $1.86 on the day, to settle at $80.26
> Prompt-Month Henry Hub (Feb 23) was down $-0.084 on the day, to settle at $4.475

Despite all the FEAR and NOISE, these are still good prices. All of our model portfolio companies are going to report solid Q4 results with many of them reporting their best year EVER.

Happy New Year to all of you and thank you again for your support.

Next week I plan to catch up on several Small-Caps that should be big winners for us in 2023.