Oil & Gas Prices - Mar 13

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dan_s
Posts: 34469
Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - Mar 13

Post by dan_s »

Opening Prices: Pre-market opening trades were primarily automated sells triggered by stop-loss orders.
> WTI is down $3.76 to $72.92/bbl, and Brent is down $3.75 to $79.03/bbl. < WTI at $73.20 at time of this post
> Natural gas is down -3.0c to $2.4/MMBtu. < HH APR23 up $0.12 to $2.55 at the time of this post

AEGIS Notes with my comments in blue
Oil

Oil falls to lowest in nearly three months amid concerns over tightening monetary policy and SVB failure
amid concerns over tightening monetary policy and SVB failure

April ’23 WTI lost $3.76 this morning to trade around $73/Bbl
Brent falls below $80/Bbl for the first time since early February
Crude, along with other assets, are under pressure this morning following last week’s collapse of Silicon Valley Bank

Crude remains under pressure following Fed Chair Powell’s remarks last week with expectations for higher-than-expected rate hikes

Saudi Aramco is cautiously optimistic that the oil market will remain tightly balanced in the short to medium term (Reuters)
Aramco projects that consumption will likely reach a record 102 MMBbl/d by the end of 2023 as the market focuses on Chinese demand recovery
Amin Nasser, CEO of Aramco, said spare capacity remained tight at 2 MMBbl/d and that rising demand for jet fuel coincided with China's reopening
Nasser cautioned that he still did not see enough investment going into the sector to meet demand over the long term and that if that trend persisted, supply would not be sufficient in the mid-to-long-term < Demand for oil-based products will exceed supply within a few months.

Natural Gas

Natural gas reverses some of Friday’s losses soon after the markets opened, up 2.5% to $2.55 in the prompt month
The Summer ’23 seasonal strip is up 2c to $2.88, and the Winter ‘23/’24 strip is down 3c to $3.77 < Maybe the strip is telling us that $2.50 HH gas price is not the "Right Price". If you believe natural gas prices will remain under $3.00 you should sell all of your "gassers".

Weather forecasts indicate temperatures will be below normal for the remainder of March, although they are expected to rise to near-normal at the end of the month < Winter Storm Sage blasting New England today.

Production came close to an all-time high this weekend at 101.53 Bcf/d, according to data from PointLogic

FERC Chairman wants faster energy infrastructure project approvals (NGI)
Chairman Philips spoke of the need for additional natural gas pipelines to distribute gas domestically and to LNG facilities on the Gulf Coast
Several US regions, such as New England and California, lack adequate pipeline capacity and are often constrained
The environmental permitting process for the construction of energy infrastructure has delayed several pipelines, such as the 2 Bcf/d Mountain Valley Pipeline in the US Northeast
Chairman Phillips said, “We are looking at each and every project in an accelerated way” < Finally, these nerds are starting to see the potential of natural gas to be the real near-term solution to lowering carbon emissions.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34469
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - Mar 13

Post by dan_s »

Closing Prices:
> Prompt-Month WTI (Apr 23) was down $-1.88 on the day, to settle at $74.80 < Fear of the Fed is in control for now.
> Prompt-Month Henry Hub (Apr 23) was up $0.176 on the day, to settle at $2.606 < Weather is in control for now.

Trading Economics:
"WTI crude futures dropped as much as 5% to around $73 per barrel on Monday, a level not seen since early December, as financial contagion fears drove a broad risk-off day across markets. The collapse of Silicon Valley Bank and New York-based Signature Bank triggered concerns about risks to other banks from the Federal Reserve's sharpest rate hike cycle since the early 1980s. At the same time, persistent worries about a global recession continued to cloud the demand outlook, particularly in the US and Europe. Still, speculation about a recovery in Chinese demand and a weaker dollar kept a floor under prices. Investors expect China's oil imports to hit a record high in 2023 amid growing demand for transportation fuel and as new refineries come online. Saudi Aramco CEO Amin Nasser said on Sunday that the company is cautiously optimistic in short to midterm due to China's reopening, a pick up in demand for jet fuels, and minimal spare capacity."

"US natural gas futures surged by over 7% to above $2.6/MMBtu on Monday, recovering from an almost 3-week low of $2.4 hit earlier in the session, on soaring LNG exports and higher demand. The total amount of gas flowing to the seven biggest US LNG export plants has increased to 13.1 bcfd so far in March 2023 from 12.8 bcfd in February surpassing a monthly record of 12.9 bcfd hit in March 2022 as the Freeport LNG export plant returned to service after the fire-related shutdown in June 2022. Meanwhile, average US gas demand, including exports, is expected to rise to 120.4 bcfd next week from 119.8 bcfd this week, above Refinitiv's outlook on Friday. On the other hand, average gas output in the US Lower 48 states grew to 98.8 bcfd this month, up from 98.2 bcfd in the previous period. On top of that, the latest EIA report showed gas stockpiles were about 22% above their five-year average during the week ended March 3." < Winter Storm Sage will the storage surplus, which is not much more than a rounding error in the U.S. natural gas market that is now more than 37 Trillion cubic feet per year. There is not a "glut" of ngas in the U.S.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34469
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - Mar 13

Post by dan_s »

I just noticed that Europe's natural gas price benchmark (the TTF) has increased more than 26% since last week to $16.60/Mmbtu and the Asian benchmark price (JKM) is up to $14.16/Mmbtu. These prices are much lower than they were last summer during the Bidding War to refill storage due to Europe being cut off from Russia, but they show us that international gas prices are keeping demand for U.S. LNG very high.
Dan Steffens
Energy Prospectus Group
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