Oil & Gas Prices - April 13

[dan_s]

Opening Prices:
> WTI is down $0.31 to $82.95/bbl, and Brent is down $0.39 to $86.94/bbl.
> Natural gas is down -1.0c to $2.083/MMBtu. (As of 07:44 AM CDT)

AEGIS Notes
Oil

Oil trades slightly lower but holds near a five-month high
May ’23 WTI lost 31c this morning to trade around $82.95/Bbl
The U.S. dollar fell to its lowest in nearly two months, making oil more affordable for holders of other currencies
Prompt WTI surged $1.73/Bbl on Wednesday, hitting 2023's highest following a slightly better-than-expected March CPI
Energy Secretary Granholm's comments about refilling the SPR to pre-Ukraine conflict levels before year-end gave crude some support
IEA's executive director, Fatih Birol, said on Wednesday that oil prices might surpass $85/Bbl in 2H2023 due to demand outpacing supply (BBG)

U.S. to refill the SPR in 2023 if advantageous for taxpayers (Reuters)
U.S. Energy Secretary Jennifer Granholm confirmed the U.S. administration's focus on refilling the SPR this year as long as it is advantageous for taxpayers < This is total BS because she knows that refilling the SPR this year will send WTI price through the roof. On second though "she knows" is probably not accurate.

Granholm stated that the SPR will continue selling crude oil from storage sites until the remaining 26 MMBbl mandated by Congress for 2023 are sold
The administration's target for refilling the reserve remains at $67-$72/Bbl

China's oil imports surge to the highest in nearly three years (BBG)
In March, China imported 12.37 MMBbl/d of crude oil, the highest level since June 2020, representing a 16% increase from February
Refiners in China have ramped up refinery runs in recent weeks, preparing for a rise in consumption as the country’s economy recovers
Russian crude oil imports to China hit a record high of 1.46 MMBbl/d in March, with Urals crude at 0.59 MMBbl/d, according to Kpler
However, the OPEC+ output cut may affect Russian flows to China. Some Chinese refiners may consider cheaper options from West Africa and Latin America

Natural Gas

Natural gas prices are trading around $2.08 after falling 4.25% yesterday
The EIA will release its weekly natural gas storage report today, expected to be the first injection of 2023
The median expectation is for an injection of 26 Bcf, while the Bloomberg survey ranges from 20-35 Bcf

US Natural gas consumption in January and February reached a multi-year low (EIA)
Gas consumption in January averaged 106.8 Bcf/d, the lowest level since 2017, and 104.5 Bcf/d in February, the lowest since 2018
The drop in gas demand is attributed to significantly elevated temperatures during this period which reduced the need for space heating
Most of the demand reduction occurred in the Midwest and Northeast regions, while the West experienced one of the coldest winters in several years and used 33% more gas than the five-year average

Calpine planning new gas-fired power plants in Texas following government proposal (BBG)
After Texas state legislators approved a bill incentivizing the construction of additional natural gas power generation, Calpine announced they would construct a 425 MW plant in Freestone County
Development of gas-fired power generation has slowed in Texas, with gas-fired generation growing by 944 MW in the past decade compared to 43,800 MW from renewables

[dan_s]

Closing Prices:
> Prompt-Month WTI (May 23) was down $-1.10 on the day, to settle at $82.16
> Prompt-Month Henry Hub (May 23) was down $-0.086 on the day, to settle at $2.007