Oil & Gas Prices - June 30
Posted: Tue Jun 30, 2020 8:32 am
Opening Prices:
> WTI is down 66c to $39.04/Bbl, and Brent is down 71c to $41.00/Bbl.
> Natural gas is up 5.1c to $1.760/MMBtu.
July HEAT = more demand for natural gas. August is the front month futures contract. This morning this is morn than $1.00/MMBtu difference between the August NYMEX contract and the January NYMEX contract that will be the front month by the end of November. I cannot recall seeing that large of a gap over just a five month period. What we need to see are weekly builds in natural gas storage dropping sharply during July.
Raymond James note on demand for transportation fuels.
"As we explained in May, we are using traffic congestion data from TomTom to quantify the pace of recovery in ground transport. It was already abundantly clear in May that trough traffic levels had been in the rearview mirror, and data from June confirms the continuation of improvement. In the third week of April - when nearly all of the aforementioned 4.3 billion people were in lockdown - our tracker's average decline (without weighting by population) versus previousyear levels was 22%. By the end of May, the y/y comparison was a 15% decline, and as of last week it was an 11% decline.
As shown in the adjacent table, Europe stands out for the magnitude of its traffic recovery, bearing in mind that Western European countries had typically been the first ones outside China to enter lockdowns, and their containment of the pandemic has been (similar to China) highly effective. Recovery is tracking slower in Asia-Pacific, as COVID case count continues to escalate in India and parts of Southeast Asia, requiring the continuation of economic restrictions. The same point generally applies to the U.S., though the trajectory varies a great deal from state to state, and in much of the country the fall-off was not as steep to begin with.
.
Ground transport, of course, is not the entirety of global oil demand: it accounts for approximately half. Aviation, marine, petrochemical, and
other industrial end markets - collectively comprising the other half of the "pie" - have their own individual demand dynamics, generally separate
from how ordinary businesses in cities are allowed to function. For example, passenger air travel is showing recovery in domestic routes, but less
so in international (cross-border) routes, due to the proliferation of mandatory quarantines. On the whole, our perspective on everything other
than gasoline and diesel demand is on par with what we laid out in May, but ground transport recovery is tracking ahead of our expectations."
> WTI is down 66c to $39.04/Bbl, and Brent is down 71c to $41.00/Bbl.
> Natural gas is up 5.1c to $1.760/MMBtu.
July HEAT = more demand for natural gas. August is the front month futures contract. This morning this is morn than $1.00/MMBtu difference between the August NYMEX contract and the January NYMEX contract that will be the front month by the end of November. I cannot recall seeing that large of a gap over just a five month period. What we need to see are weekly builds in natural gas storage dropping sharply during July.
Raymond James note on demand for transportation fuels.
"As we explained in May, we are using traffic congestion data from TomTom to quantify the pace of recovery in ground transport. It was already abundantly clear in May that trough traffic levels had been in the rearview mirror, and data from June confirms the continuation of improvement. In the third week of April - when nearly all of the aforementioned 4.3 billion people were in lockdown - our tracker's average decline (without weighting by population) versus previousyear levels was 22%. By the end of May, the y/y comparison was a 15% decline, and as of last week it was an 11% decline.
As shown in the adjacent table, Europe stands out for the magnitude of its traffic recovery, bearing in mind that Western European countries had typically been the first ones outside China to enter lockdowns, and their containment of the pandemic has been (similar to China) highly effective. Recovery is tracking slower in Asia-Pacific, as COVID case count continues to escalate in India and parts of Southeast Asia, requiring the continuation of economic restrictions. The same point generally applies to the U.S., though the trajectory varies a great deal from state to state, and in much of the country the fall-off was not as steep to begin with.
.
Ground transport, of course, is not the entirety of global oil demand: it accounts for approximately half. Aviation, marine, petrochemical, and
other industrial end markets - collectively comprising the other half of the "pie" - have their own individual demand dynamics, generally separate
from how ordinary businesses in cities are allowed to function. For example, passenger air travel is showing recovery in domestic routes, but less
so in international (cross-border) routes, due to the proliferation of mandatory quarantines. On the whole, our perspective on everything other
than gasoline and diesel demand is on par with what we laid out in May, but ground transport recovery is tracking ahead of our expectations."