Boo! Happy Halloween
Opening Prices:
> WTI is up $0.48 to $82.79/bbl, and Brent is up $0.53 to $87.98/bbl.
> Natural gas is up 6.4c to $3.416/MMBtu.
MY QUICK TAKE: As I discussed in the newsletter, the War in Israel is likely to have the most day-to-day impact on oil prices. The trend we may see is that oil spikes up on Fridays because the paper traders don't want to hold short positions over the weekend. If nothing happens over the weekend to escalate the fighting, especially directly related to Iran, oil prices may pull back each Monday.
AEGIS Notes
Oil
Oil is trading higher around $83, after falling more than $3 yesterday
Russian oil shipments climbed for the third consecutive week, overshooting the target set alongside Saudi Arabia to keep some supply off the market
The majority of exports have been shipped to China and India < Have you noticed how China is "winning" by taking advantage of the West's sanctions against Russia. China's able to buy oil from Russia at much cheaper prices and we are powerless to do anything about it. We could sanction India but that would not be a good political move.
Alaskan oil plan threatens future drilling in the state (BBG)
The Biden Administration is pursuing changes that would make it more difficult to pursue oil extraction from new leases in Alaska
ConocoPhillips Alaska said the plan “would discourage investment in the North Slope by adding more layers of permitting requirements and restrictions, even for existing leases,”
The Interior Department argues that the changes are needed to balance development and environmental protection
The administration said the changes won't affect “currently authorized oil and gas operations,” including the 600 MMBbl Willow project approved earlier this year
Natural Gas
Natural gas (Dec) edged 14c higher to $3.51 shortly after 8:30 AM as recent weather model runs showed a shift cooler
The balance of the Winter ’23-’24 strip (Dec-Mar) was up by about 14c as well to $3.55
Most of the early morning lift was isolated to the next 9-12 months of the gas strip
American and European weather models added heating degree days to the outlook overnight, according to NGI
The increase in cold was centered over the Midwest and East Nov. 9-11
“Traders need to be on their toes in case the midday data were to trend further colder or reverse warmer” for day eight to 15 of the outlook (NatGasWeather)
AEGIS Press Release
AEGIS Markets Celebrates Its First Anniversary with Continued Growth on its Hedge Marketplace
After a tremendous year of progress ensuring compliance and improving the efficacy of hedging markets, AEGIS SEF will be referred to as AEGIS Markets going forward. Regarding this change, Chris Payne, President of AEGIS Markets, stated, “We’re overwhelmed by the support and feedback from the Dealers and End Users who are executing on our swap execution facility. While compliance remains important, our mission has always focused on creating a modern marketplace for hedging transactions."
Oil & Gas Prices - Oct 31
Oil & Gas Prices - Oct 31
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Oct 31
Looks like Biden gonna get his DOE wish on buying 6 million barrels around 79 dollars. Amazing how these wishes come true with all the MidEast and Ukrainian madness. I know, China is very weak and no consumer demand..Pfft..
Re: Oil & Gas Prices - Oct 31
Good day for the gassers.
Trading Economics
"US natural gas futures rose above the $3.55/MMBtu mark, approaching the nine-month high of $3.65/MMBtu from October 10th amid renewed expectations of strong demand ahead of the North American winter. Fresh forecasts signaled colder-than-usual weather at the start of November before sharper winter chills take place from the second half of the month in key regions of the United States, lifting demand expectations for gas-intensive heating. The outlook challenged persistent evidence of strong supply, with the latest data showing that October should end with an average production of 104.1 billion cubic feet per day, surpassing July’s record of 103.1 billion cubic feet per day. In the meantime, the latest figures from the EIA showed that US utilities added 74 billion cubic feet of gas into storage on the week until October 20th, below market expectations of an 80 billion cubic feet build, but sharply above the five-year average."
We are going to see four more natural gas storage reports from EIA before the official end of the storage refill season on November 17th. It would be nice to see the first draw from storage for the week ending November 3rd. As far as I can tell, that would be the earliest draw from storage for space heating.
My WAG is that storage will be 3,800 Bcf on November 17, which compares to 3,564 Bcf a year ago. 3,800 Bcf would be high, but well within the 5-yr range and definitely "manageable". Last year we actually had an 80 Bcf draw from storage the week ending November 18, 2022. November and December were bullish last year until after Christmas when we began the warmest winter on record in the eastern half of the U.S.
Trading Economics
"US natural gas futures rose above the $3.55/MMBtu mark, approaching the nine-month high of $3.65/MMBtu from October 10th amid renewed expectations of strong demand ahead of the North American winter. Fresh forecasts signaled colder-than-usual weather at the start of November before sharper winter chills take place from the second half of the month in key regions of the United States, lifting demand expectations for gas-intensive heating. The outlook challenged persistent evidence of strong supply, with the latest data showing that October should end with an average production of 104.1 billion cubic feet per day, surpassing July’s record of 103.1 billion cubic feet per day. In the meantime, the latest figures from the EIA showed that US utilities added 74 billion cubic feet of gas into storage on the week until October 20th, below market expectations of an 80 billion cubic feet build, but sharply above the five-year average."
We are going to see four more natural gas storage reports from EIA before the official end of the storage refill season on November 17th. It would be nice to see the first draw from storage for the week ending November 3rd. As far as I can tell, that would be the earliest draw from storage for space heating.
My WAG is that storage will be 3,800 Bcf on November 17, which compares to 3,564 Bcf a year ago. 3,800 Bcf would be high, but well within the 5-yr range and definitely "manageable". Last year we actually had an 80 Bcf draw from storage the week ending November 18, 2022. November and December were bullish last year until after Christmas when we began the warmest winter on record in the eastern half of the U.S.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Oct 31
Closing Prices:
> Prompt-Month WTI (Dec 23) was down $-1.29 on the day, to settle at $81.02
> Prompt-Month Henry Hub (Dec 23) was up $0.223 on the day, to settle at $3.575
> Prompt-Month WTI (Dec 23) was down $-1.29 on the day, to settle at $81.02
> Prompt-Month Henry Hub (Dec 23) was up $0.223 on the day, to settle at $3.575
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Oct 31
Only took a week for paper traders to give Biden his wish. Oh,what a crap show. Anybody just selling calls on all their oil and gas stocks into earnings season? This trend over the last few quarters seems logical...
Re: Oil & Gas Prices - Oct 31
Time to fill up the SPR! Pump baby, pump.