Oil & Gas Prices - April 14

[dan_s]

I am in Dallas today.

Opening Prices
> WTI is up $0.03 to $82.19/bbl, and Brent is down $0.02 to $86.07/bbl. < WTI at $82.81 at time of this post.
> Natural gas is down -2.4c to $1.983/MMBtu. As of 08:04 AM CDT < Back to $2.11 when this was posted.

AEGIS Notes
Oil

Oil heads for a fourth consecutive weekly gain
May ’23 WTI gained 3c this morning to trade around $82.19/Bbl
The U.S. Dollar fell to its lowest since April 2022, making oil more affordable for holders of other currencies
Equities rose yesterday after CPI and PPI data came in as expected or slightly below expectations

IEA lowers global crude production expectations for 2023 in its monthly report
OPEC released its monthly report, explaining the reasons behind the bloc's unexpected production cuts
Kurdish oil exports (0.45 MMBbl/d) remained halted since March 25 as Iraq negotiates with Turkey

IEA warns of potential price increases and inflation; Supply growth revised down due to OPEC+ cuts (BBG)
IEA, in its monthly report, revised the 2023 oil supply down by 0.4 MMBbl/d due to OPEC's production cuts
Global production growth is expected to slow sharply to 1.2 MMBbl/d in 2023 from 4.6 MMBbl/d in 2022, with the US and Brazil being major producers
Global oil demand for 2023 is unchanged at 101.9 MMBbl/d, with non-OECD countries driving 90% of the growth, while the U.S. and Europe have slowing demand due to industrial activity weakness
The group warns that the gap between crude demand and supply forecasts for 2023 could lead to higher prices and inflation

OPEC highlights supply and market uncertainty in April report (BBG)
OPEC+ keeps the 2023 global demand growth forecast at +2.3 MMBbl/d in their April report but lowers U.S. and European demand due to possible recession
Non-OPEC 2023 supply to grow 1.4 MMBbl/d; US, Brazil, Norway, Canada, Kazakhstan, and Guyana to lead growth; Russian supply expected to decline
OPEC notes uncertainty around U.S. production growth and emphasizes supply surplus of crude inventories above 5-year averages
The cartel described its output cuts as "precautionary measures aimed at supporting the stability of the market" based on the current output of 0.3 MMBbl/d above what's needed for April-June 2023

Natural Gas

Natural gas prices trade below $2.00 after falling 4% yesterday
The Summer ’23 strip is trading around $2.35, and the Winter ‘23/’24 strip is trading near $3.36
Yesterday, the EIA reported the first storage injection of 2023, coming in at 25 Bcf and bringing total underground storage to 1,855 Bcf

Biden Admin approves Alaska LNG project (Reuters)
On Thursday, the administration approved exports of LNG from the Alaska LNG project located on the Kenai Peninsula in southern Alaska
The project will also include a proposed 807-mile pipeline to transport stranded gas from northern Alaska
The project is opposed by several environmental groups who plan to sue to stop the project

Former ERCOT CEO says Texas bill on power plants is dangerous (BBG)
Brad Jones, the former interim CEO of ERCOT, said that the state legislature has already given regulators all the tools needed to support the reliability of the power grid
The new tax-payer funded legislation would incentivize the construction of additional gas-fired power plants
Jones said that the state stepping into the market would be disruptive and unnecessary

Government forecasters issue El Nino watch (BBG)
The US Climate Prediction Center increased the likelihood of an El Nino weather event forming between August and October to 74% from 61% a month ago
An El Nino would reduce the chances of an active hurricane season and potentially lead to warmer-than-average temperatures across the northern US

[dan_s]

Closing Prices:
> Prompt-Month WTI (May 23) was up $0.36 on the day, to settle at $82.52
> Prompt-Month Henry Hub (May 23) was up $0.107 on the day, to settle at $2.114

MY TAKE: WTI closing on Friday over $82 makes $81 a hard floor. At least I hope so.