Oil & Gas Prices - May 25

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dan_s
Posts: 34807
Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - May 25

Post by dan_s »

Opening Prices:
> WTI is down $1.06 to $73.28/bbl, and Brent is down $1.01 to $77.35/bbl.
> Natural gas is down -1.0c to $2.388/MMBtu.

AEGIS Notes
Oil

OPEC+ is unlikely to make fresh cuts at its June meeting, said Russia’s Alexander Novak
Many analysts hold the same sentiment that the June 3 to 4 meeting won’t bring any surprises, even after Saudi Arabia delivered another warning to short sellers this week
A surprise production cut from OPEC+ last month initially scattered bearish oil speculators and sent prices rallying, but a cloudy global economy outlook helped prices subside (BBG)

Global oil trade flows are being redrawn (Bloomberg)
Western sanctions are channeling more barrels from Russia to Asia’s largest economies
China and India took more than 30% of their combined imports from Russia, Iran, and Venezuela, according to data from Kpler
Exports from traditional suppliers have collapsed as Asia has taken about 40% less from West Africa and the U.S.
Have you noticed that many of the policies coming out of Washington DC help China's economy?

Natural Gas

Natural gas prices are trading lower, around $2.38, reversing gains from yesterday
Weather forecast changes were mixed with the Northeast region forecast warming by 15 °F and the South Central’s cooling by 14.9 °F over the two-week forecast period
Today’s forecast changes lead to a net reduction in expected gas demand over the next two weeks

Gas output from the DJ Basin hasn’t grown despite low drilling costs (S&P)
Despite drilling costs being lower than in other regions, such as the Permian Basin, gas output has remained at about 2.35 Bcf/d for the past year and a half
Much of the cost difference comes from lower water and labor costs in the DJ Basin than in other basins
S&P expects production in the DJ Basin to grow only slightly before plateauing mid-decade due to core inventory exhaustion

Asia ramps up coal imports (Reuters)
China, India, Vietnam, and The Philippines accounted for 53% of global thermal coal imports and more than 70% of global power sector emissions
China’s imports of coal have grown 90% year over year as the Chinese economy recovers from their Covid-zero policy
Many market participants expected China’s reopening to tighten the global LNG market as economic activity recovered; however, Chinese LNG imports have not recovered as the country’s power sector has built new coal plants and shunned high-priced gas imports
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34807
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - May 25

Post by dan_s »

Closing Prices:
> Prompt-Month WTI (Jul 23) was down $-2.51 on the day, to settle at $71.83
> Prompt-Month Henry Hub (Jun 23) was down $-0.091 on the day, to settle at $2.307

Trading Economics:
"WTI crude futures fell more than 4% to nearly $71 per barrel, ending a three-day winning streak, after Russian Deputy Prime Minister Alexander Novak ruled out additional production cuts by OPEC+. Noak said that OPEC+ is unlikely to take additional steps in June because just a month ago certain decisions were made regarding the voluntary reduction of oil production by some countries. Earlier this week, Saudi Arabia’s energy minister warned short sellers to “watch out” for potential consequences, raising speculations that OPEC+ could consider further output cuts at a meeting on June 4th. Meanwhile, a rise in the US dollar amid uncertainty over the debt ceiling also pressured prices down. Still, EIA data pointed to a recovery in US demand ahead of the driving-intensive Memorial Day weekend holiday." < Let's say that Saudi Arabia does want to crush the short sellers. Why not tell your Russian buddy to say OPEC+ is not going to cut production and then actually cut production a few days later? No matter what the cartel does or doesn't do, the fundamentals point to a very tight oil market this summer.

"US natural gas futures extended losses toward $2.3/MMBtu, down from a 2-month high of $2.7 last week, driven by increased output and revised forecasts indicating lower demand in the coming weeks. The average gas output in the U.S. Lower 48 states rose to 101.5 billion cubic feet per day (bcfd) so far in May, surpassing April's record. Despite a smaller-than-expected storage build, prices declined due to rising Canadian exports and milder U.S. weather conditions. Meteorologists projected near-normal weather conditions through June 9, and U.S. gas demand, including exports, is expected to ease in the coming week. Gas exports from Canada started to rise as energy firms ramped up production with easing fire conditions. Meanwhile, the amount of U.S. power generated by wind dropped, leading to increased gas usage by power generators. And gas flows to major U.S. LNG export plants have decreased due to maintenance work." < Getting the fires in Canada under control is good news for CPG, ROK and IPOOF.
Dan Steffens
Energy Prospectus Group
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