Oil & Gas Prices - April 22

[dan_s]

Notes below are from Trading Economics with my comments in blue.

WTI Oil Price
WTI crude oil futures rose above $63 per barrel on Tuesday, likely in a technical rebound after falling over 2% in the previous session.
> However, the outlook remains bearish as progress in US-Iran talks raises the possibility of a deal that could bring Iranian oil exports back to the market.
> Investors also remain cautious amid economic headwinds from tariffs and growing uncertainty over US monetary policy, both of which are expected to weigh on the broader economy and potentially reduce oil demand.
> A recent poll indicated nearly a 50% chance of a US recession within a year.
> At the same time, OPEC+ is still set to raise output by 411 thousand barrels per day in May, though some of that may be offset by cuts from countries exceeding their quotas.
FEAR of "Drill Baby Drill" has faded. FEAR of recession due to the Tariff Wars is now the primary headwind, but I believe the fear will fade quickly after Q2 IF THE REPUBLICANS PASS THE INCOME TAX BILL. FEAR of the OPEC+ output increase is way overblown since 411,000 bpd is just 0.4% of global oil demand and all it really does is offset the decline in Venezuela oil exports. Plus, demand for oil always increases in May.

U.S. Natural Gas Price
US natural gas futures dropped over 5% to $3.0/MMBtu yesterday and up about 5 cents this morning, the lowest since late January, as record production and forecasts for milder weather reduced expectations for demand.
> Output in the Lower 48 states hit new highs in April, with daily production peaking at 108 bcfd.
> Also, warmer-than-usual temperatures are expected through early May, lowering heating needs and allowing more gas to be stored.
> At the same time, uncertainty over President Trump’s shifting tariff policies has raised concerns about slower global growth and weaker energy demand.
> Still, gas exports remain strong, with LNG flows hitting a record 16.1 bcfd this month, boosted by increased activity at a major export facility under construction in Louisiana.
MY TAKE: Mid-April to Mid-May is the weakest demand for U.S. natural gas. Demand for electricity from gas-fired power plants will soon be ramping up and LNG exports will continue to set records month-after-month since total design capacity of existing LNG export facilities is 17.8 Bcf per day and it will increase to 18.5 Bcf per day when Exxon's Golden Pass Train 1 comes online in Q4 2025. By Q4 2026 U.S. LNG export capacity will be 22.0 Bcf per day.

Here is my updated oil and gas price deck:
WTI Oil / HH NGas
2025
Q1: $70.00 / $3.50 < Actuals were slightly higher
Q2: $62.50 / $3.25
Q3: $65.00 / $4.00
Q4: $67.50 / $4.50
For the year 2026: $75.00 / $4.50 assuming we don't have a significant global recession.

[dan_s]

LNG Canada is expected to on-line within three months. Design capacity is 1.8 Bcf per day, but it will take a year to ramp up to that.

As we discussed on our April 21st webinar, the Western Canada natural gas market is re-balancing and gas prices in Canada should drift up to $3.00Cdn/mcf by year-end and then ramp to $4.00Cdn/mcf by mid-2026. The total North American natural gas market will get very tight in 2H 2026.

For more fundamental information on the North American natural gas market see the recent presentations on the Antero Resources (AR) and Peyto (PEY.TO) websites.