Oil & Gas Prices - April 20

[dan_s]

Opening Prices:
> WTI is down $1.30 to $77.86/bbl, and Brent is down $1.41 to $81.71/bbl.
> Natural gas is up 2.2c to $2.244/MMBtu.

AEGIS Notes with my comments in blue
Oil

Oil plunges further as the dollar strengthens and demand concerns mount
> May ’23 WTI lost $1.30 this morning to trade around $77.86/Bbl < Lots of "noise" will keep the volatility high in the futures "paper market", but the highest demand period of the year for transportation fuels is just ahead and gasoline & diesel inventories are low.
> A Federal Reserve survey showed the U.S. economy stalled in recent weeks, with hiring and inflation slowing, and credit access narrowing
> However, the Fed is expected to hike interest rates again in May, which could hurt oil demand
> Additionally, the U.S. dollar continued to strengthen relative to its recent lows, making oil expensive for holders of other currencies
> Soaring inflation in Europe and economic data coming out of China are also weighing on oil prices this week < IMO the Fed is not going to stop inflation with more interest rate hikes. Maybe we should stop massive federal spending programs for awhile.

Gasoline demand in Southeast Asia weakens during peak season (BBG)
Crack spreads, or refining margins in Singapore, have more than halved since March to the lowest since December
Stocks of fuels, including gasoline, are at their highest level for this time of the year since 1995
Increased fuel exports from China are adding to the region's supplies, according to traders
Despite weaker Southeast Asian markets, European demand for gasoline is resilient, India's demand for fuels is rising, and Chinese demand is also improving < Demand growth in China and India is MUCH MORE IMPORTANT than a weaker SE Asia market.

Natural Gas

Natural gas prices are trading higher after falling 14c yesterday
Weather forecasts have shifted cooler, with the Lower 48 forecast losing 7.5 °F over the two-week period
All regions shifted cooler, other than the West

Early nominations indicate production has fallen about 1.5 Bcf/d from yesterday, which appears to be related to maintenance on pipelines in the Northeast < Market forces will have US ngas storage levels back to normal in a few months. Upstream companies are reducing well completions, LNG exports remain high and summer bring high demand for electricity from natural gas fired power plants.

Mitsui buys Texas gas asset (Reuters)
> The Japanese company has purchased a 92% stake in an unconventional gas asset located in the Eagle Ford region, calling it a “pragmatic solution” for the energy transition
> The asset has the ability to produce about 200 mmcf/d and has an advantageous location near Gulf Coast LNG facilities
> This purchase comes after the Japanese government said at the G7 summit that LNG will remain key to Japan’s energy security for the next 10-15 years < More and more countries now realize that wind & solar are not a viable solution for a modern economy.

Utility executives expect electricity demand to triple by 2050 (S&P)
> Speaking at Platts Global Power Markets Conference, the CEOs of Entergy and Xcel Energy both acknowledged that US power demand could triple by 2030 amid the push for increased electrification
> They also spoke of the importance of balancing reliability and affordability as fossil fuel-based energy sources are slowly phased out and replaced with renewables
> The CEO of Xcel Energy said they are preserving their gas fleet as they shut down coal plants but will look to move away from gas-fired power generation by 2050 < My guess is that they know that wind & solar are BS and they say this stuff to be WOKE.

[dan_s]

Closing Prices:
> Prompt-Month WTI (May 23) was down $-1.87 on the day, to settle at $77.29
> Prompt-Month Henry Hub (May 23) was up $0.027 on the day, to settle at $2.249