Oil & Gas Prices - May 15

[dan_s]

Opening Prices:
> WTI is up $1.03 to $28.59/Bbl, and Brent is up 88c to $32.01/Bbl. < A six week high for WTI.
> Natural gas is up 3.4c to $1.715/MMBtu.

Closing Prices:
> WTI prompt month (JUN 20) was up $1.87 on the day, to settle at $29.43/Bbl.
> NG prompt month (JUN 20) was down $0.035 on the day, to settle at $1.646/MMBtu.

Global oil market now might be under-supplied by early 3rd quarter. < Isn't it amazing how fast market forces work.
LONDON, May 15 (Reuters) - U.S. petroleum consumption has started to rise as the economy emerges from lockdowns imposed to control the spread of the new coronavirus, giving the oil industry hope it has come through the lowest point in the cycle.

Similar recoveries in fuel consumption are expected at varying rates across the other major economies as they gradually emerge from lockdown and are likely to push the oil market into supply deficit in the third quarter.

In most cases, the recovery in petroleum demand is expected to be led by middle distillates, as the manufacturing, construction and freight transportation sectors return to work.

Gasoline consumption will increase, with some diversion of travel from public transport to private motor cars for health reasons, but with the overall gain limited by the loss of leisure-related travel.

But jet fuel use is likely to remain depressed for an extended period, as continued quarantines and pressure to introduce social distancing on flights prevents the sector struggles from resuming meaningful schedules.

The result will be an increase in relative demand for light distillates (gasoline) compared with middle distillates (diesel but especially jet), which the refining system will have to accommodate.
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WTI Oil Price Assumption for EPG forecast/valuation models:
2020
Q1: $45
Q2: $20
Q3: $30
Q4: $40
2021: $50 < Even this is an unsustainable oil price once we move on from Crazy Coronavirus World because "all of the cheap oil has been harvested".