Opening Prices:
> WTI is down $0.44 to $76.61/bbl, and Brent is down $0.27 to $83.18/bbl.
> Natural gas is down -4.3c to $2.704/MMBtu
AEGIS Notes with my comments in blue
Oil
Oil sheds some of yesterday's gains amid concerns about an economic slowdown < This has to be the most "advertised" recession in history.
April ’23 WTI lost 44c this morning to trade around $76.60/Bbl
China and India released strong manufacturing and oil-sales data yesterday
Strong manufacturing data from China, the top crude importer, indicated a further recovery in Chinese demand
India's domestic sales of refined oil products grew strongly in February (BBG)
Despite a recovery in Chinese demand, prices have been held back by concerns of a slowdown in the economy as the Fed tightens monetary policy in response to high inflation
Russian crude exports resilient despite the full force of western sanctions (Bloomberg)
According to Kpler data, Russian shipped 7.32 MMBbl/d of crude and petroleum products in February, which is in line with recent months' exports
Despite the resilience, Russia's oil exports face new challenges as India, one of its biggest buyers, is under increasing pressure from bankers to show that the cargoes adhere to the $60/Bbl price cap
More oversight may affect India's purchases of Russian barrels
Additionally, next month’s exports may also be affected as a result of the Kremlin's decision to reduce oil production by 0.5 MMBbl/d in response to the Western bans
Natural Gas
Natural gas is trading lower, around $2.72
Weather forecasts are mixed today, with most regions forecast warming in the 6-10 day period and cooling in the 11-15 day period
Temperatures are expected to be about 10 °F lower than normal through the first half of March
Fewest interstate pipelines constructed in 2022 since 1995 (S&P)
In 2022 a total of 897 MMcf/d of pipeline capacity was added, compared to 8 Bcf/d in 2021 and 4 Bcf/d in 2020
A spokesperson for the Natural Gas Supply Association said, “We noticed this trend last year, and it concerns us, particularly as we’ve seen the impact of limited infrastructure on the Northeast and in California over the past year”
The EIA attributed the reduced construction activity to a greater focus on intrastate pipelines and lower overall spending by midstream companies
Enbridge invests $1 billion in renewable natural gas (Reuters)
Pipeline operator Enbridge has committed to investing $1 billion into Divert Inc, which converts waste from landfills and farms into pipeline-quality natural gas
Divert will sell its gas to companies who are looking to meet renewable energy and climate goals, such as BP, which signed a 10-year supply deal with Divert
Vice President of Strategy at Enbridge said, “This is historic for Enbridge because we see a huge opportunity for RNG from wasted food to be a key solution to achieving net-zero greenhouse gas emissions”
Oil & Gas Prices - Mar 1
Oil & Gas Prices - Mar 1
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Mar 1
MY TAKE: Other than Fear of Recession, the oil traders are focused on Russian oil exports and China oil imports.
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Reuters reported that China’s factory activity rose last month, for the first time in seven months. PMI data also showed manufacturing activity expanding at the fastest rate in over a decade, reinforcing expectations of a strong economic rebound in the world’s largest oil importer.
China’s oil demand is seen as the chief factor behind expectations for higher oil prices later in the year. A recent Reuters poll among economists showed most expect Brent crude to top $90 per barrel in the second half of the year. The respondents cited Chinese demand and Russian supply as factors.
The China demand expectations were so pronounced this week that they offset the American Petroleum Institute’s estimate that crude oil inventories in the United States had expanded for yet another week. According to the API, the build came in at 6.2 million barrels. < Crude oil inventories in the U.S. are growing because a lot of refineries are doing annual maintenance projects.
Government data on U.S. inventories from the Energy Information Administration is out later today but the EIA, too, has been reporting sizeable inventory builds over the past several weeks.
The U.S. inventory reports have capped oil price gains to an extent lately, and OPEC production data may add to that cap. According to a Reuters survey, the group’s combined output rose by 150,000 bpd in February from the previous month to a total 28.97 million barrels daily. < This is still 700,000 bpd lower than what OPEC produced in September last year but if the increase is confirmed, it would suggest OPEC is not as rigid about its output limit enforcement as demonstrated.
By Charles Kennedy for Oilprice.com
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Reuters reported that China’s factory activity rose last month, for the first time in seven months. PMI data also showed manufacturing activity expanding at the fastest rate in over a decade, reinforcing expectations of a strong economic rebound in the world’s largest oil importer.
China’s oil demand is seen as the chief factor behind expectations for higher oil prices later in the year. A recent Reuters poll among economists showed most expect Brent crude to top $90 per barrel in the second half of the year. The respondents cited Chinese demand and Russian supply as factors.
The China demand expectations were so pronounced this week that they offset the American Petroleum Institute’s estimate that crude oil inventories in the United States had expanded for yet another week. According to the API, the build came in at 6.2 million barrels. < Crude oil inventories in the U.S. are growing because a lot of refineries are doing annual maintenance projects.
Government data on U.S. inventories from the Energy Information Administration is out later today but the EIA, too, has been reporting sizeable inventory builds over the past several weeks.
The U.S. inventory reports have capped oil price gains to an extent lately, and OPEC production data may add to that cap. According to a Reuters survey, the group’s combined output rose by 150,000 bpd in February from the previous month to a total 28.97 million barrels daily. < This is still 700,000 bpd lower than what OPEC produced in September last year but if the increase is confirmed, it would suggest OPEC is not as rigid about its output limit enforcement as demonstrated.
By Charles Kennedy for Oilprice.com
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Mar 1
From Trading Economics at noon:
WTI crude futures were trading around $77 per barrel on Wednesday as investors weighed prospects of a recovery in Chinese demand against a gloomy outlook for the US.
> Robust manufacturing and services activity data out of China supported prospects for a strong rebound in consumption. Investors expect China's oil imports to hit a record high in 2023 amid rising demand for transportation fuel and as new refineries come online.
> Still, the latest ISM report showed that the US manufacturing sector contracted for a fourth consecutive month in February, adding to concerns about sluggish demand at a time when inventories continue to rise.
> Today's EIA report showed that US crude inventories rose by 1.166 million barrels last week, much higher than market forecasts for a 457,000 barrel increase.
> On the supply side, Russia revealed its plans to cut oil exports from its western ports by up to 25% in March, exceeding its announced output curbs of 500,000 barrels per day.
Conclusion: Fear of recession keeping a lid on oil prices, but all of the supply/demand (primarily China and Russia) information is bullish for oil prices
WTI crude futures were trading around $77 per barrel on Wednesday as investors weighed prospects of a recovery in Chinese demand against a gloomy outlook for the US.
> Robust manufacturing and services activity data out of China supported prospects for a strong rebound in consumption. Investors expect China's oil imports to hit a record high in 2023 amid rising demand for transportation fuel and as new refineries come online.
> Still, the latest ISM report showed that the US manufacturing sector contracted for a fourth consecutive month in February, adding to concerns about sluggish demand at a time when inventories continue to rise.
> Today's EIA report showed that US crude inventories rose by 1.166 million barrels last week, much higher than market forecasts for a 457,000 barrel increase.
> On the supply side, Russia revealed its plans to cut oil exports from its western ports by up to 25% in March, exceeding its announced output curbs of 500,000 barrels per day.
Conclusion: Fear of recession keeping a lid on oil prices, but all of the supply/demand (primarily China and Russia) information is bullish for oil prices
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Mar 1
Closing Prices:
> Prompt-Month WTI (Apr 23) was up $0.64 on the day, to settle at $77.69
> Prompt-Month Henry Hub (Apr 23) was up $0.064 on the day, to settle at $2.811
> Prompt-Month WTI (Apr 23) was up $0.64 on the day, to settle at $77.69
> Prompt-Month Henry Hub (Apr 23) was up $0.064 on the day, to settle at $2.811
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group