Oil & Gas Prices - Sept 21

[dan_s]

Keep in mind that there can be wild swings in the front month NYMEX contracts because the Paper Traders must close out their positions.

Opening Prices:
> WTI is up $0.87 to $90.53/bbl, and Brent is up $0.65 to $94.18/bbl.
> Natural gas is down -2.0c to $2.713/MMBtu.

AEGIS Notes
Oil

Oil edges higher following Fed announcement as Russia imposes a fuel export ban
October ’23 WTI gained 83c this morning to trade around $90.49/Bbl

The US Fed left the benchmark rate unchanged for September while indicating there’s one more 25 bp hike ahead
The prospect of higher rates pushed the dollar to a new six-month high
Crude traded lower following the FOMC meeting despite a draw from storage

Cushing storage reported a 2.1 MMBbl draw, hitting its lowest seasonal level since 2018
US crude exports were at 5.1 MMBbl last week, with Asian buyers turning to the US due to Saudi and Russian oil cuts

ussia temporarily curbs diesel and gasoline exports (Bloomberg)
Russia temporarily bans diesel and gasoline exports to stabilize surging domestic fuel prices
The government's press office said that “temporary restrictions will help saturate the fuel market, which in turn will reduce prices for consumers”
In the first half of September, Russian diesel and gasoil exports fell by 31% MoM to around 63,000 tons per day or 0.47 MMBbl/d amid refinery maintenance and government-led efforts to redirect fuel to the domestic market
ICE gasoil crack in Northwest Europe surged by nearly $5 to about $39/Bbl today amid fears of global shortages with reduced crude supplies from major OPEC+

Natural Gas

Natural gas prices are down slightly, ahead of the EIA inventory report
The median expectation for this week’s storage report is an injection of 65 bcf according to the Bloomberg survey
The survey ranges from a low of 58 Bcf to a high of 69 Bcf
The five-year average injection for this week of the year is 89 Bcf

Northern Border Pipeline to increase capacity in Bakken (S&P)
300 MMcf/d of additional capacity will be added through compressor station expansions in North Dakota, which will be leased by Bison Pipeline, enabling gas to reach new markets
The Bison Pipeline has not shipped any gas since 2015 and currently has no customers
This will allow gas produced in the Bakken to reach Wyoming and on to the Cheyanne Hub
The capacity expansion comes as Northern Border’s primary source of gas has shifted from Western Canada to the Bakken
Northern Border connects to the TC Foothills pipeline in Canada, which has been flowing well below capacity at the Canada-Montana border due to system constraints further downstream

Mexican LNG project nears start-up (S&P)
A floating LNG export terminal being developed by New Fortress to be deployed off the coast of northern Mexico is nearing completion
The facility is expected to enter service by the end of September; however, it still requires an export permit from the US DOE
The project requires a US export permit because it will be supplied by gas produced in the US, which will then be shipped to Mexico from the Valley Crossing Pipeline in South Texas

[dan_s]

Closing Prices:
> Prompt-Month WTI (Nov 23) was down $-0.03 on the day, to settle at $89.63
> Prompt-Month Henry Hub (Oct 23) was down $-0.123 on the day, to settle at $2.610

Fear of possible government shutdown and fear of UAW strike causing some investors to move cash to the sidelines.

Global oil market is going to get a lot tighter in Q4.