Oil & Gas Prices - June 23
Posted: Mon Jun 22, 2020 8:45 am
Opening Prices:
> WTI is down 36c to $39.39/Bbl, and Brent is down 21c to $41.98/Bbl.
> Natural gas is up 2.7c to $1.696/MMBtu.
Closing Prices:
> WTI prompt month (JUL 20) was up $0.71 on the day, to settle at $40.46/Bbl.
> NG prompt month (JUL 20) was down $0.005 on the day, to settle at $1.664/MMBtu.
I believe this is the final day of trading for the July WTI contract. August is now the "front month" that you will see quoted here.
Bloomberg: The big oil turnaround: From negative prices to a bull market
Every day, traders in London congregate at 4 p.m. to buy and sell North Sea oil for half an hour. The window, as it’s known in the industry, is where competition between the most powerful players in the market sets the price of Brent crude. Two months ago, every trader wanted to sell cargoes and none were keen to buy. Now the window has transformed into a bull market, where bids outnumber offers 10 to one and prices are surging.
On June 17 Bloomberg reported that Vitol Group says that fuel demand is recovering at a pace of 1.4 million b/d each week in June, according to its chief economist. China led the recovery in April and May and in the past couple of weeks, and U.S. and European countries have followed. The chief economist was quoted as saying, “the forward outlook is more uncertain as it depends on the evolution of the virus and the economy." His base scenario was for oil demand globally to be down around 5% year-on-year by 4Q20.
On June 18 S&P Global Platts reported it sees global oil demand increasing by an average of about 4 million b/d per month in June, July and August led by gasoline. Barring a second wave of lockdowns, demand will grow sharply over the next three months before waning in September.
On June 18 Reuters reported a recovery in demand for gasoline in the United States, the world's largest market for the motor fuel, hit a plateau last week as coronavirus cases surged in some states, undercutting refiners' efforts to ramp up low fuel production. Gasoline consumption inched lower last week after three straight weeks of rises, according to Energy Information Administration data on Wednesday. Product supplied of gasoline - a proxy for demand - eased 30,000 b/d to 7.9 million b/d amid a spike in new infections in six states. The dip in demand follows five consecutive weeks of increases in refining rates. Refiners last week ran at 73.8% of capacity, the highest since early April, EIA said.
On June 17 Reuters reported U.S. shale producers are expected to restore roughly half a million barrels per day (bpd) of crude output by the end of June, according to crude buyers and analysts, amounting to a quarter of what they shut since the coronavirus pandemic cut fuel demand and hammered oil prices. Such a swift rise in U.S. production would complicate efforts by top producers Saudi Arabia and Russia to encourage global allies to fulfill their pledges to make record production cuts. U.S. producers cut supply by roughly 2 million b/d. But the recovery in benchmark oil prices to around $40 a barrel makes some shale output profitable again, even though that level is unlikely to spur additional new drilling activity.
On June 18 Reuters reported an OPEC+ panel pressed countries such as Iraq and Kazakhstan on Thursday to comply better with oil cuts and left the door open for extending or easing record production curbs from August. The panel, known as the Joint Ministerial Monitoring Committee (JMMC), advises OPEC+ and will meet again on July 15, when it would recommend the next level of cuts, designed to support oil prices battered by the coronavirus pandemic. After July, the cuts are due to taper to 7.7 million b/d until December. Two OPEC+ sources said Thursday's virtual JMMC meeting didn't discuss extending record cuts beyond July. An OPEC+ statement also made no mention of such plans and said Iraq and Kazakhstan presented a plan for how to compensate for May overproduction in July-September.
On June 19 Reuters is reporting that a second and final trio of ships used as floating storage tanks for gasoline is en route to unload cargoes in Indonesia, Sri Lanka and Malaysia, showing that fuel demand is growing across Asia and ending the glut, according to industry sources and shipping data.
> WTI is down 36c to $39.39/Bbl, and Brent is down 21c to $41.98/Bbl.
> Natural gas is up 2.7c to $1.696/MMBtu.
Closing Prices:
> WTI prompt month (JUL 20) was up $0.71 on the day, to settle at $40.46/Bbl.
> NG prompt month (JUL 20) was down $0.005 on the day, to settle at $1.664/MMBtu.
I believe this is the final day of trading for the July WTI contract. August is now the "front month" that you will see quoted here.
Bloomberg: The big oil turnaround: From negative prices to a bull market
Every day, traders in London congregate at 4 p.m. to buy and sell North Sea oil for half an hour. The window, as it’s known in the industry, is where competition between the most powerful players in the market sets the price of Brent crude. Two months ago, every trader wanted to sell cargoes and none were keen to buy. Now the window has transformed into a bull market, where bids outnumber offers 10 to one and prices are surging.
On June 17 Bloomberg reported that Vitol Group says that fuel demand is recovering at a pace of 1.4 million b/d each week in June, according to its chief economist. China led the recovery in April and May and in the past couple of weeks, and U.S. and European countries have followed. The chief economist was quoted as saying, “the forward outlook is more uncertain as it depends on the evolution of the virus and the economy." His base scenario was for oil demand globally to be down around 5% year-on-year by 4Q20.
On June 18 S&P Global Platts reported it sees global oil demand increasing by an average of about 4 million b/d per month in June, July and August led by gasoline. Barring a second wave of lockdowns, demand will grow sharply over the next three months before waning in September.
On June 18 Reuters reported a recovery in demand for gasoline in the United States, the world's largest market for the motor fuel, hit a plateau last week as coronavirus cases surged in some states, undercutting refiners' efforts to ramp up low fuel production. Gasoline consumption inched lower last week after three straight weeks of rises, according to Energy Information Administration data on Wednesday. Product supplied of gasoline - a proxy for demand - eased 30,000 b/d to 7.9 million b/d amid a spike in new infections in six states. The dip in demand follows five consecutive weeks of increases in refining rates. Refiners last week ran at 73.8% of capacity, the highest since early April, EIA said.
On June 17 Reuters reported U.S. shale producers are expected to restore roughly half a million barrels per day (bpd) of crude output by the end of June, according to crude buyers and analysts, amounting to a quarter of what they shut since the coronavirus pandemic cut fuel demand and hammered oil prices. Such a swift rise in U.S. production would complicate efforts by top producers Saudi Arabia and Russia to encourage global allies to fulfill their pledges to make record production cuts. U.S. producers cut supply by roughly 2 million b/d. But the recovery in benchmark oil prices to around $40 a barrel makes some shale output profitable again, even though that level is unlikely to spur additional new drilling activity.
On June 18 Reuters reported an OPEC+ panel pressed countries such as Iraq and Kazakhstan on Thursday to comply better with oil cuts and left the door open for extending or easing record production curbs from August. The panel, known as the Joint Ministerial Monitoring Committee (JMMC), advises OPEC+ and will meet again on July 15, when it would recommend the next level of cuts, designed to support oil prices battered by the coronavirus pandemic. After July, the cuts are due to taper to 7.7 million b/d until December. Two OPEC+ sources said Thursday's virtual JMMC meeting didn't discuss extending record cuts beyond July. An OPEC+ statement also made no mention of such plans and said Iraq and Kazakhstan presented a plan for how to compensate for May overproduction in July-September.
On June 19 Reuters is reporting that a second and final trio of ships used as floating storage tanks for gasoline is en route to unload cargoes in Indonesia, Sri Lanka and Malaysia, showing that fuel demand is growing across Asia and ending the glut, according to industry sources and shipping data.