Oil & Gas Prices - May 19

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Posts: 32171
Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - May 19

Post by dan_s »

Opening Prices:
> WTI is up $1.32 to $73.18/bbl, and Brent is up $1.44 to $77.30/bbl.
> Natural gas is up 4.2c to $2.634/MMBtu.


Oil heads for a first weekly gain in a month
June ’23 WTI gained $1.32 this morning to trade around $73.18/Bbl
Signals of progress in debt ceiling negotiations by President Biden and Speaker of the House McCarthy supported prices (BBG)
McCarthy suggested that an agreement in principle may be reached over the weekend

The market awaits comments from Fed Chair Powell for guidance on future monetary policy later today

China's demand recovery is being closely monitored, although some economic data fell short of expectations
However, refinery runs have increased in anticipation of higher demand

Alberta's wildfires increased marginally, causing several companies to halt production and evacuate staff (BBG)
As weather conditions are forecasted to worsen, the situation is expected to deteriorate

UK announces new sanctions on Russia, more expected at G7 summit (Reuters)
Today, the UK announced a new round of sanctions against Russia, focusing on companies linked to the theft of Ukrainian grain and those partaking in Russian energy exports
These sanctions affect key Russian energy and military shipment companies
Alongside the U.S. and other G7 countries, the UK is preparing to announce more sanctions against Russia at the upcoming G7 summit in Japan

South Korea and Taiwan resume crude purchases amid lower freight costs (BBG)
South Korean and Taiwanese oil refineries, after a period of inactivity, have procured at least 14 MMBbl of crude oil from the U.S., with the majority set to arrive in August
Despite lower shipping costs spurring purchases from the U.S., Asian refining profits remain low
These purchases provide some relief to the physical market, which has seen an over-supply of low-sulfur, light oil

Libya's National Oil Company Aims for a Ten-Year High in Oil Production (BBG)
Libya sets its sights on escalating oil production by roughly 8% to 1.3 MMBbl/d by December, according to Farhat Bengdara, the chairman of the Libyan NOC
He added that $17 billion in investment spread across 45 projects would enable the NOC to lift production to 2 MMBbl/d in five years
Despite recurrent disruptions due to political instability, oil output has stayed steady this year, suggesting the country's troubles might be easing

Natural Gas

Natural gas prices are higher, around $2.66, heading for the highest weekly close since March
The Winter ‘23/’24 strip is higher by 3c at $3.73, and the Summer ’24 strip is up 3c to $3.43
Weather forecasts indicate temperatures slightly below the 10-year normal over the next two weeks, averaging 66.7 °F next week and 69.8 °F the week after

US imports of natural gas from Canada fall amid wildfires (Reuters)
Gas flows out of Canada have fallen to a 25-month low of 6.4 Bcf/d as production has been shut in Alberta
There are currently a total of 92 active fires, with 25 considered to be out of control, according to Alberta’s wildfire dashboard
Gas production in Alberta is higher than last week at 9.3 Bcf/d, but still depressed by about 2 Bcf/d compared to last month’s average production

MISO calls for power market reform (Reuters)
MISO which operates the power grid of the US Midwest has called for reforms to "maintain reliability and send the right pricing signals to the market"
The grid operator said that they continue to see volatility and uncertainty in capacity auctions and that managing the system has become more challenging as the generation mix changes
The recent MISO planning resource auction cleared at prices between $2/MW-day and $15/MW-day for all zones except the Southeast Texas-Louisiana region, which cleared at $59/MW-day for fall and $19/MW-day for Winter
Dan Steffens
Energy Prospectus Group
Posts: 32171
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - May 19

Post by dan_s »

Closing Prices:
> Prompt-Month WTI (Jun 23) was down $-0.31 on the day, to settle at $71.55
> Prompt-Month Henry Hub (Jun 23) was down $-0.007 on the day, to settle at $2.585 < JUL23 closed at $2.71, so Q3 gas prices should exceed the $2.50 HH gas price that I am using in all of my forecast models.
Dan Steffens
Energy Prospectus Group
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