GUSH is down over 5% Reasons for this beat down?
GUSH is down over 5% Reasons for this beat down?
Good afternoon! GUSH a composite of several O&G stocks, some off Dan's lists is down over 5% and killing O&G stocks. WTI is up Dow is weak but not in the red. Reasons for why the beatdown today? Unemployment did increase a bit, signal to the market the economy is going south?
Re: GUSH is down over 5% Reasons for this beat down?
Trading Economics:
WTI crude futures fell by 0.8% to close at $83.16 per barrel on Friday, as the growing likelihood of a Gaza ceasefire overshadowed robust summer fuel demand and potential supply disruptions from hurricanes in the Gulf of Mexico. Efforts to mediate a ceasefire and release hostages in Gaza gained momentum on Friday with a revised proposal from Hamas and Israel's willingness to resume stalled negotiations, potentially easing regional tensions and thus reducing oil prices. Still, oil posted its fourth consecutive weekly gain, rising about 3%, driven by falling US crude inventories and strong seasonal demand. The US EIA reported a significant 12.2 million barrel drop in US crude stockpiles last week, far exceeding the anticipated 680K barrel draw. Additionally, Hurricane Beryl, a Category 2 storm, made landfall in Mexico after causing at least 11 fatalities and widespread damage across several Caribbean islands, further raising supply concerns.
Traders often over-react to hurricanes. Once it is clear that the hurricane is not going to cause serious damage that might shut-in production, the Longs close out their oil & gas NYMEX contracts; especially on a Friday. There are going to be several more big hurricanes heading our way.
Trading Economics:
US natural gas futures fell to $2.35/MMBtu, the lowest in seven weeks, due to increased production and oversupply. A heat wave is expected to persist through mid-July, but output in the Lower 48 states averaged 101.8 bcfd so far in July, up from June's 100.2 bcfd. Production hit a 17-month low of 99.5 bcfd in May but higher prices in recent weeks encouraged producers like EQT and Chesapeake Energy to resume drilling. The latest EIA report showed gas in storage was 18.8% above the seasonal norm. Meanwhile, LNG export plant flows are slightly lower in July when compared with June, mainly due to reduced feedgas at Cheniere Energy's Sabine Pass.
WTI crude futures fell by 0.8% to close at $83.16 per barrel on Friday, as the growing likelihood of a Gaza ceasefire overshadowed robust summer fuel demand and potential supply disruptions from hurricanes in the Gulf of Mexico. Efforts to mediate a ceasefire and release hostages in Gaza gained momentum on Friday with a revised proposal from Hamas and Israel's willingness to resume stalled negotiations, potentially easing regional tensions and thus reducing oil prices. Still, oil posted its fourth consecutive weekly gain, rising about 3%, driven by falling US crude inventories and strong seasonal demand. The US EIA reported a significant 12.2 million barrel drop in US crude stockpiles last week, far exceeding the anticipated 680K barrel draw. Additionally, Hurricane Beryl, a Category 2 storm, made landfall in Mexico after causing at least 11 fatalities and widespread damage across several Caribbean islands, further raising supply concerns.
Traders often over-react to hurricanes. Once it is clear that the hurricane is not going to cause serious damage that might shut-in production, the Longs close out their oil & gas NYMEX contracts; especially on a Friday. There are going to be several more big hurricanes heading our way.
Trading Economics:
US natural gas futures fell to $2.35/MMBtu, the lowest in seven weeks, due to increased production and oversupply. A heat wave is expected to persist through mid-July, but output in the Lower 48 states averaged 101.8 bcfd so far in July, up from June's 100.2 bcfd. Production hit a 17-month low of 99.5 bcfd in May but higher prices in recent weeks encouraged producers like EQT and Chesapeake Energy to resume drilling. The latest EIA report showed gas in storage was 18.8% above the seasonal norm. Meanwhile, LNG export plant flows are slightly lower in July when compared with June, mainly due to reduced feedgas at Cheniere Energy's Sabine Pass.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: GUSH is down over 5% Reasons for this beat down?
Total active rigs drilling for oil and gas in the U.S. gained for the first time after six consecutive weekly declines, adding 4 to 585 according to Friday's report from Baker Hughes.
Despite the increase, the total count was still down 95 rigs, or 14%, below this time last year.
Drilling rigs targeting crude oil in the U.S. were unchanged at 479, remaining at its lowest level since December 2021, while gas rigs gained 4 to 101 and 5 rigs remained classified as miscellaneous.
Rigs targeting oil in the Permian Basin lost 2 to 301, and rigs in the Eagle Ford rose by 1 to 45.
Despite the increase, the total count was still down 95 rigs, or 14%, below this time last year.
Drilling rigs targeting crude oil in the U.S. were unchanged at 479, remaining at its lowest level since December 2021, while gas rigs gained 4 to 101 and 5 rigs remained classified as miscellaneous.
Rigs targeting oil in the Permian Basin lost 2 to 301, and rigs in the Eagle Ford rose by 1 to 45.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group