Oil & Gas Prices - April 19

[dan_s]

Trading Economics:
"Brent crude futures dropped 2% to around $83 per barrel on Wednesday, moving further away from a five-month peak of $87.5 hit earlier this month, as worries that higher interest rates set by the Federal Reserve could dampen growth in the top oil-consuming country kept investors on edge. Keeping a floor under prices were falling US inventories and prospects of robust demand from China after GDP data pointed to a sharper-than-expected recovery. The latest API report showed that crude oil stocks in the US fell by 2.675 million barrels last week, above market expectations and offering a somewhat bullish outlook for short-term demand." < Fear of Recession is offsetting bullish fundamentals.

Here is what API reported late yesterday for the U.S.:
> Crude inventories down 2.68 million barrels with Cushing down 0.6 million bbls
> Gasoline inventories down 1.0 million barrels
> Distillates inventories down 1.9 million barrels

[dan_s]

Opening Prices:
> WTI is down $1.44 to $79.42/bbl, and Brent is down $1.49 to $83.28/bbl.
> Natural gas is down -8.6c to $2.28/MMBtu.

AEGIS Notes
Oil

Oil falls below $80/Bbl amid resurfacing demand concerns < FEAR is a powerful emotion.
May ’23 WTI lost $1.44 this morning to trade around $79.42/Bbl

Market awaits Fed's economic survey for insight into the economy's health and monetary policy path
Atlanta Fed President Raphael Bostic said on Tuesday that the U.S. Federal Reserve might have one more rate hike in store to combat inflation (Reuters)
Fears of further interest rate hikes outweigh bullish Chinese economic data

The U.S. Dollar strengthened relative to its recent lows, making oil expensive for holders of other currencies

Iraq hopes to restart Kurdistan crude exports this week (BBG)
“Today or tomorrow, we will go to sign the agreements with SOMO and the oil companies to resume exports,” said Iraq’s Prime Minister, Mohamed Shia al-Sudani
However, Baghdad needs to settle outstanding financial claims with Turkey before Kurdish oil can flow through Ceyhan Port again
Turkey halted pipeline flows (0.45 MMBbl/d) on March 25 after an international tribunal ruled that Kurdistan needs Iraq's approval to export crude via Ceyhan

Natural Gas

Natural gas prices are down nearly 4% to $2.28 after climbing to a multi-week high yesterday
The Summer ’23 strip is down 9.4c to $2.58, and the Winter ‘23/’24 strip is lower by 6.8c to $3.55 < IMO the NYMEX strip is telling us that HH ngas under $3.00 is an unsustainable price. "A commodity price that can't stay at a certain price (clearly sub-economic), won't stay at that price for long."

Weather forecast models have shifted warmer, with the Lower 48 two-week forecast warming by 6 °F
The largest change was the Southeast region’s forecast, which warmed by 26.4 °F
Lower 48 gas demand is expected to average about 70 Bcf/d over the next three weeks as temperatures across the US moderate

NYISO warns peaker plant limits could threaten electrical grid (S&P) < How are we going to charge all of those new EVs?
A rule instituted by a New York environmental regulator to go into effect in 2025 will limit the number of nitrogen oxides that fossil-fuel-powered peaking generation plants can emit
A recent report by NYISO, which manages New York’s grid, warns that this rule could lead to a generation shortfall in 2025
NYISO’s demand projections imply a generation margin of only 50 MW in summer 2025; however, they said that in higher demand scenarios, a shortage of 120-350 MW is possible

Baker Hughes sees multi-decade boom in natural gas demand growth (BBG)
Forecasters at oilfield service provider Baker Hughes see natural gas demand growth continuing to increase for multiple decades
The company’s long-term outlook is based on LNG demand growth and the use of natural gas as a crucial aspect of the energy transition

[dan_s]

Closing Prices:
> Prompt-Month WTI (May 23) was down $-1.70 on the day, to settle at $79.16
> Prompt-Month Henry Hub (May 23) was down $-0.144 on the day, to settle at $2.222