Oil & Gas Prices - Feb 22

[dan_s]

Opening Prices:
> WTI is down $0.37 to $75.99/bbl, and Brent is down $0.46 to $82.59/bbl.
> Natural gas is down -0.3c to $2.07/MMBtu.

AEGIS Notes
Oil

Oil extends losses ahead of U.S Federal Reserve minutes
April ’23 WTI lost 37c this morning to trade around $76/Bbl < APR23 is now the front month NYMEX contract for WTI
Crude prices continued to decline for a fifth-consecutive day amid Russia’s resilience against western sanctions and concerns of economic slowdown
The release of the Fed’s minutes today may indicate further clues on the path forward to monetary tightening in the U.S.
Despite a recovery in Chinese demand, prices have been held back by concerns of a slowdown in the US economy as the Fed tightens monetary policy in response to high inflation
Also weighing on prices this week was a strong US dollar that is at a nine-week high

The Caspian Pipeline Consortium (CPC), an important route for Kazakhstan's oil exports, has stopped taking crude from the Tengiz field today due to storms in the Black Sea (BBG)
CPC is still accepting some crude from other Kazakh and Russian fields at reduced rates as inventories are almost full
The consortium said that the output in the Tengiz field is unaffected for now, but in the past, outages have caused Kazakhstan to cut production temporarily
The pipeline transports 67 million tonnes of oil a year (around 1.2 MMBBL/d)
Kazakhstan expects CPC to start loading on Thursday as the weather is forecast to improve

Natural Gas

Gas prices fall below $2 for the first time in over two years (BBG)
The March Henry Hub futures contract fell to $1.987 on Tuesday, with prices down more than 70% since late last year
Unseasonably warm weather this January and February has reduced demand for gas and lifted inventories above the five-year average
This January was the sixth warmest recorded, and several New England states had their warmest January ever this year

Winter storm threatens northern US, while south could see record heat (Reuters)
A storm tracking from the west coast through the northern plains and Midwest is expected to bring blizzard conditions and record snowfall
The National Weather Service said that Minnesota and Wisconsin would be the states most impacted by the storm
Meanwhile, states in the southern US are unseasonably warm, with Orlando forecast to hit a record high of 90 °F this week
Five States that burn the most natural gas for space heating are: Minnesota, Illinois, Wisconsin, Michigan, Ohio. Texas is #6

Tellurian ramps up production (Reuters)
On Wednesday, Tellurian reported that the company had increased gas production to 225 MMcf/d, up from year-ago levels of 55 MMcf/d
Tellurian has been developing its Driftwood LNG export facility in Louisiana and has invested about $1 billion in it
The proposed facility has been hit with several setbacks, however, including two major customers raising concerns that the project may not be completed

[dan_s]

Closing Prices:
> Prompt-Month WTI (Apr 23) was down $-2.41 on the day, to settle at $73.95
> Prompt-Month Henry Hub (Mar 23) was up $0.101 on the day, to settle at $2.174 < I think the "paper traders" won't have as many long positions to close now that we've moved past the MAR23 contract. At least I hope so. Getting Freeport back online should help.