Opening Prices:
> WTI is up $1.71 to $77.60/bbl, and Brent is up $1.75 to $82.36/bbl.
> Natural gas is down -7.3c to $2.887/MMBtu.
AEGIS Notes
Oil
Oil is trading higher, around $77.50, reversing losses from last week
WTI prices fell by $1.26 last week in the fourth consecutive weekly decline
The Cal ’24 strip is up $1.30 to $76.22, and the Cal ’25 strip is higher by $1.20 to $72.28
The US Dollar index continues to fall, now down more than 3% since the start of November, which should be supportive of oil prices
Speculators ("Paper Traders") holding negative view on oil prices ahead of OPEC meeting (BBG)
Money managers have cut their net-long positions in crude oil futures to the lowest level in 20 weeks ahead of the OPEC+ meeting on November 26
In the past, OPEC has called out negative sentiment by speculators and short sellers as weighing on oil prices
The meeting will determine the future of OPEC’s supply cuts and if they will be extended into 2024 < IMO there is a 99% chance they extend the supply cuts into 2024 and a 50% chance that Saudi Arabia increases the supply cuts.
Kuwait’s Al Zour refinery to reach full capacity soon (BBG)
Kuwait’s 615 MBbl/d mega-refinery is expected to reach full capacity in the next few weeks after suffering a shutdown earlier this month
The Al Zour refinery is one of the largest oil processing facilities in the Middle East
Natural Gas
Natural gas prices trade lower amid concerns of oversupply
The Winter ‘23/’24 strip is down 6.7c to $2.954, and the Summer ’24 strip is down by 4.6c to $3.011
Production hit a new record of 105.34 Bcf/d, driven by strong output in the Northeast and South Central, with potential further increases from the Permian Basin expected following the Gulf Coast Express maintenance
On the weather front, the Euro Ens indicates warming in the Northeast, Midwest, and Southeast, with Lower 48 temperatures rising nearly +9 degrees, especially in the 1-5 day period
Despite the warm shift, temperatures are projected to remain at or below the 10-year normal into early December
NextDecade aims expansion of Rio Grande LNG by 2024 (NGI)
NextDecade targets to expand its Rio Grande LNG export project in South Texas, aiming to finalize plans by mid-2024
The initial phase in Brownsville will add three trains, increasing export capacity to 17.6 Mtpa by 2027
With a FID in July and $18.4 billion in financing, the firm has begun front-end engineering and design (FEED) and is securing engineering procurement and construction (EPC) for a train 4 with Bechtel Corp
CEO Matt Schatzman highlighted the focus on commercializing and achieving a positive FID for Train 4 in the second half of 2024 and the progression of Train 5
Oil & Gas Prices - Nov 20
Oil & Gas Prices - Nov 20
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
NG over production
Typically, we see strong #natgas production over the weekend, then it falls on Monday/Tuesday. This week broke that trend, with today’s receipts setting a new record.
NG over production and lower demand means lower prices
5 of the next 7 months are below 3.oo
Why don't these guys drop production?
NG over production and lower demand means lower prices
5 of the next 7 months are below 3.oo
Why don't these guys drop production?
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Re: Oil & Gas Prices - Nov 20
A few things to keep in mind:
> It is extremely expensive to stop and start drilling programs in reaction to short-term commodity prices changes.
> D & C programs for upstream companies are based on the long-term outlook for commodity prices. The long-term outlook for U.S. natural gas price remains quite bullish. At the time of this post the 2024/2025 winter strip (DEC24 to MAR25) is $4.10/MMBtu.
> Although HH ngas prices have pulled back recently, they are still much higher than they were in Q2 and Q3.
> Winter has not begun. We are a few weeks away from a significant increase in natural gas demand. The ngas storage level might seem high to you, but it is still well within the 5-year range. There really is not a glut of ngas in the U.S. market, which is the largest gas market on Earth.
> Winter weather also impacts field work, so upstream companies like to complete wells prior to Old Man Winter's arrival.
We all wish natural gas prices were higher, but our gassers are still quite profitable at the current gas prices. Q4 results are going to be better than Q3 results. HH ngas averaged $2.66 in Q3.
> It is extremely expensive to stop and start drilling programs in reaction to short-term commodity prices changes.
> D & C programs for upstream companies are based on the long-term outlook for commodity prices. The long-term outlook for U.S. natural gas price remains quite bullish. At the time of this post the 2024/2025 winter strip (DEC24 to MAR25) is $4.10/MMBtu.
> Although HH ngas prices have pulled back recently, they are still much higher than they were in Q2 and Q3.
> Winter has not begun. We are a few weeks away from a significant increase in natural gas demand. The ngas storage level might seem high to you, but it is still well within the 5-year range. There really is not a glut of ngas in the U.S. market, which is the largest gas market on Earth.
> Winter weather also impacts field work, so upstream companies like to complete wells prior to Old Man Winter's arrival.
We all wish natural gas prices were higher, but our gassers are still quite profitable at the current gas prices. Q4 results are going to be better than Q3 results. HH ngas averaged $2.66 in Q3.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Nov 20
More Global Oil Market News & Commentary
Saudi Arabia Considers Extending Oil Production Cuts
(FINANCIAL TIMES) Saudi Arabia is likely to extend its 1 million barrel-a-day oil production cut until spring next year, responding to falling oil prices and heightened tensions over the Israel-Hamas conflict. OPEC+ is discussing additional cuts of up to 1 million b/d at its November 26 meeting in Vienna, potentially straining relations with the U.S. Some OPEC members, including Kuwait, Algeria, and Iran, are particularly concerned about the conflict.
Oil Prices Surge Over 2.5% on Anticipation of OPEC+ Supply Cuts
(REUTERS) Oil prices surged over 2.5%, with Brent and U.S. crude futures gaining $2 a barrel in anticipation of further OPEC+ supply cuts. Brent crude reached $82.80 a barrel, up $2.19, while U.S. West Texas Intermediate crude rose by $2.13 to $78.02. Both contracts settled 4% higher on Friday following reports that OPEC+ may consider additional supply cuts in its upcoming meeting on Nov. 26. Traders are awaiting OPEC's decision, expecting any cuts to be modest given previous production reductions. Concerns about a U.S. recession and Walmart's deflation warning are also being monitored. The increase in U.S. oil and gas rigs, along with growing refinery production, adds to market dynamics.
YPF SA's U.S.-Listed Shares Surge 24.3% on Optimism Over Argentina's New Right-Wing President
(MARKETWATCH.COM) In premarket trading on Monday, U.S.-listed shares of YPF SA surged by 24.3%, reaching a one-month high. Investors celebrated the election of right-wing populist Javier Milei as Argentina's new president, contributing to a broader uptrend in shares of Argentina-based companies. The Global X MSCI Argentina ETF also experienced a significant boost of 12.2%, poised to open at its highest price since September 5. Notable gains were observed in other active components, with Grupo Financiero Galicia SA witnessing a 14.5% increase and Grupo Supervielle SA rallying by 2.5%.
Brazil's Petrobras Explores Offshore Oil Potential Amid Global Energy Shift
(FINANCIAL TIMES) Brazil's state-controlled oil giant, Petrobras, is extending its dominance in the pre-salt region, contributing to the country's ambitious oil production goals. The pre-salt reserves, buried beneath the Atlantic, have propelled Brazil to the ninth-largest oil producer globally. While Petrobras aims to increase production with 11 new platforms, questions arise about the company's future strategy and Brazil's reliance on fossil fuels amidst growing climate concerns. Critics challenge President Lula's green agenda, advocating a quicker pivot to cleaner alternatives. Petrobras defends the pre-salt operations as cost-effective and relatively clean, anticipating continued importance during the energy transition. Beyond oil, Petrobras eyes the Equatorial Margin as a potential new oil frontier and explores diversification into offshore wind, aligning with Lula's push for sustainable development. However, challenges, including environmental concerns and political interference, may shape the company's complex future.
ExxonMobil Commences Production from Third Guyana FPSO, Marking Significant Milestone in Offshore Oil Development
(OGV.ENERGY) ExxonMobil, the US energy giant, has initiated production at the Payara offshore oil development in Guyana, boosting the country's total production capacity to 620,000 barrels per day. The Prosperity FPSO vessel is projected to achieve an initial production of around 220,000 barrels per day by the first half of next year. With six FPSOs anticipated to be operational on the Stabroek Block by 2027, ExxonMobil aims to reach a combined production capacity exceeding 1.2 million barrels per day. The company's collaboration with the government of Guyana and its significant contribution to the local workforce and economy underscore its commitment to the region's oil and gas sector.
Global Oil and Gas Jobs Rebound
(OILPRICE.COM) The International Energy Agency's latest World Energy Employment report reveals that the global oil and gas industry has not only fully recovered from the pandemic but has exceeded pre-pandemic employment levels. With 11.5 million people now employed in the upstream oil and gas sector, the Middle East leads in growth, surpassing pre-pandemic investment levels.
Saudi Arabia Considers Extending Oil Production Cuts
(FINANCIAL TIMES) Saudi Arabia is likely to extend its 1 million barrel-a-day oil production cut until spring next year, responding to falling oil prices and heightened tensions over the Israel-Hamas conflict. OPEC+ is discussing additional cuts of up to 1 million b/d at its November 26 meeting in Vienna, potentially straining relations with the U.S. Some OPEC members, including Kuwait, Algeria, and Iran, are particularly concerned about the conflict.
Oil Prices Surge Over 2.5% on Anticipation of OPEC+ Supply Cuts
(REUTERS) Oil prices surged over 2.5%, with Brent and U.S. crude futures gaining $2 a barrel in anticipation of further OPEC+ supply cuts. Brent crude reached $82.80 a barrel, up $2.19, while U.S. West Texas Intermediate crude rose by $2.13 to $78.02. Both contracts settled 4% higher on Friday following reports that OPEC+ may consider additional supply cuts in its upcoming meeting on Nov. 26. Traders are awaiting OPEC's decision, expecting any cuts to be modest given previous production reductions. Concerns about a U.S. recession and Walmart's deflation warning are also being monitored. The increase in U.S. oil and gas rigs, along with growing refinery production, adds to market dynamics.
YPF SA's U.S.-Listed Shares Surge 24.3% on Optimism Over Argentina's New Right-Wing President
(MARKETWATCH.COM) In premarket trading on Monday, U.S.-listed shares of YPF SA surged by 24.3%, reaching a one-month high. Investors celebrated the election of right-wing populist Javier Milei as Argentina's new president, contributing to a broader uptrend in shares of Argentina-based companies. The Global X MSCI Argentina ETF also experienced a significant boost of 12.2%, poised to open at its highest price since September 5. Notable gains were observed in other active components, with Grupo Financiero Galicia SA witnessing a 14.5% increase and Grupo Supervielle SA rallying by 2.5%.
Brazil's Petrobras Explores Offshore Oil Potential Amid Global Energy Shift
(FINANCIAL TIMES) Brazil's state-controlled oil giant, Petrobras, is extending its dominance in the pre-salt region, contributing to the country's ambitious oil production goals. The pre-salt reserves, buried beneath the Atlantic, have propelled Brazil to the ninth-largest oil producer globally. While Petrobras aims to increase production with 11 new platforms, questions arise about the company's future strategy and Brazil's reliance on fossil fuels amidst growing climate concerns. Critics challenge President Lula's green agenda, advocating a quicker pivot to cleaner alternatives. Petrobras defends the pre-salt operations as cost-effective and relatively clean, anticipating continued importance during the energy transition. Beyond oil, Petrobras eyes the Equatorial Margin as a potential new oil frontier and explores diversification into offshore wind, aligning with Lula's push for sustainable development. However, challenges, including environmental concerns and political interference, may shape the company's complex future.
ExxonMobil Commences Production from Third Guyana FPSO, Marking Significant Milestone in Offshore Oil Development
(OGV.ENERGY) ExxonMobil, the US energy giant, has initiated production at the Payara offshore oil development in Guyana, boosting the country's total production capacity to 620,000 barrels per day. The Prosperity FPSO vessel is projected to achieve an initial production of around 220,000 barrels per day by the first half of next year. With six FPSOs anticipated to be operational on the Stabroek Block by 2027, ExxonMobil aims to reach a combined production capacity exceeding 1.2 million barrels per day. The company's collaboration with the government of Guyana and its significant contribution to the local workforce and economy underscore its commitment to the region's oil and gas sector.
Global Oil and Gas Jobs Rebound
(OILPRICE.COM) The International Energy Agency's latest World Energy Employment report reveals that the global oil and gas industry has not only fully recovered from the pandemic but has exceeded pre-pandemic employment levels. With 11.5 million people now employed in the upstream oil and gas sector, the Middle East leads in growth, surpassing pre-pandemic investment levels.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Nov 20
Closing Prices:
> Prompt-Month WTI (Dec 23) was up $1.71 on the day, to settle at $77.60 < JAN24 closed at $77.64
> Prompt-Month Henry Hub (Dec 23) was down $-0.078 on the day, to settle at $2.882 < JAN24 closed at $3.066
> Prompt-Month WTI (Dec 23) was up $1.71 on the day, to settle at $77.60 < JAN24 closed at $77.64
> Prompt-Month Henry Hub (Dec 23) was down $-0.078 on the day, to settle at $2.882 < JAN24 closed at $3.066
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Nov 20
I guess we are going to need $1 ng to get some discipline. This winter looking like a bust even if we get a one month polar vortex. Now the narrative is dec 2024 looks good.. ok I will wait until next year when I see 4.
Production of 105 bcf is too much!
Production of 105 bcf is too much!
Re: Oil & Gas Prices - Nov 20
Permian is getting gassier. Need pipelines to get gas to markets. And some restraint by gassers.
ng prices 11/21
now 6 out of next 7 months have a 2 handle
From celsius energy this am
Natural gas opened the new week the same way it ended the prior week: with a loss. The front-month December contract dropped 8 cents or -2.6% to settle at $2.88/MMBTU, the lowest close since October 2. The losses were relatively evenly distributed across the futures strip with 1x UNG—which holds T+1 January contracts—shedding -2.8%. It has become a mantra, but yesterday’s losses were driven by the bearish 1-2 punch of record production and an insufficiently bullish temperature outlook, given robust early-season storage levels.
Over the weekend, natural gas production held near 105 BCF/day, up a much steeper-than-expected +4 BCF/day versus last year. This has been able to counter year-over-year gains in LNG exports, exports to Mexico, and coal-to-gas switching, all elements that bullish investors had anticipated would drive tight supply/demand imbalances this winter.
Of more immediacy, the near-term temperature outlook continues to be insufficiently inspiring.
From celsius energy this am
Natural gas opened the new week the same way it ended the prior week: with a loss. The front-month December contract dropped 8 cents or -2.6% to settle at $2.88/MMBTU, the lowest close since October 2. The losses were relatively evenly distributed across the futures strip with 1x UNG—which holds T+1 January contracts—shedding -2.8%. It has become a mantra, but yesterday’s losses were driven by the bearish 1-2 punch of record production and an insufficiently bullish temperature outlook, given robust early-season storage levels.
Over the weekend, natural gas production held near 105 BCF/day, up a much steeper-than-expected +4 BCF/day versus last year. This has been able to counter year-over-year gains in LNG exports, exports to Mexico, and coal-to-gas switching, all elements that bullish investors had anticipated would drive tight supply/demand imbalances this winter.
Of more immediacy, the near-term temperature outlook continues to be insufficiently inspiring.
ng prices. are you all having fun yet
Now next 7 months all under 3 handle!
CRK will have to borrow money again to maintain production!
Jay Allison on q4 earnings call held feb 15th;
"Now good morning, everyone are you all having fun yet"
On 2023 goals:
" This year, we plan to protect our balance sheet by adjusting our drilling program to ensure that it is funded by operating cash flow".
where are we now?, not adjusting drilling plan as he laid out in Feb. And spending on credit line to hold production thus expanding debt
Grade D-
Name is 10.41 just 42 cents from single digits. Sorry if this upsets you
Have a nice day
CRK will have to borrow money again to maintain production!
Jay Allison on q4 earnings call held feb 15th;
"Now good morning, everyone are you all having fun yet"
On 2023 goals:
" This year, we plan to protect our balance sheet by adjusting our drilling program to ensure that it is funded by operating cash flow".
where are we now?, not adjusting drilling plan as he laid out in Feb. And spending on credit line to hold production thus expanding debt
Grade D-
Name is 10.41 just 42 cents from single digits. Sorry if this upsets you
Have a nice day