Oil & Gas Prices - Jan 23

[dan_s]

At 4PM ET
> WTI was down $0.28 to close at $74.48
> HH ngas was up 6 cents to close at $2.48

HFI Research:
Oil
> Expect EIA to report a big decline in U.S. production from 13.3 million bpd to 12.1 million bpd thanks to lots of well freeze offs.
> For the week ending Jan 19, we have a crude draw of 6.75 million bbls. This week's crude figures will likely have a lot of volatility due to the cold blast that shut off both production and refinery throughput.

Natural gas
> Just as everyone is about to throw in the towel for natural gas, a potential bright spot appears. In the latest weather model update, the back end of the model gained meaningful heating degree days. < National weather service now seeing the February cold that Joe Bastardi has been forecasting for months.
> And if you look at the breakdown in the weather models, you can see the return of the Alaska ridge by the 10-15 day timeframe. The only issue that we see with this projection is that it's still very uncertain. Given the recent weather volatility, it's highly likely that we could see dramatic changes in this pattern, which will translate directly to price volatility.
> But if you forced us to give you our take on the incoming price trend, we would say with a high degree of confidence that the very bearish weather is now behind us. What you are seeing over the next 15 days is likely to be peak bearish weather for a while.
> This is good news. In our latest storage projection, you can see the large revisions in 2/2 and 2/9 weeks. But this is offset by the bullish storage projection for 1/26 week.