Oil & Gas Prices - July 16
Posted: Thu Jul 16, 2020 8:09 am
Opening Prices:
> WTI is down 47c to $40.73/Bbl, and Brent is down 33c to $43.46/Bbl.
> Natural gas is up 1.0c to $1.788/MMBtu.
Closing Prices:
> WTI prompt month (AUG 20) was down $0.45 on the day, to settle at $40.75/Bbl.
> NG prompt month (AUG 20) was down $0.055 on the day, to settle at $1.723/MMBtu.
I'm expecting to see lower crude oil imports by the U.S. each week through the summer as we should finally be past the increased imports caused by the Saudi Arabia vs Russia price war. It took ~3 months for the last of those shipments to arrive. Very little SA crude is now being shipped to the U.S. I'm also expecting a steady increase in refinery utilization. With refiners processing more crude oil, lower imports and depleting U.S. oil production U.S. crude oil inventories should be back to the 5-year range of 25-30 days of supply by the end of the summer. Just in the last five weeks U.S. crude oil inventories have dropped from 40.9 to 37.6 days of supply. Gasoline inventories are already below 30 days of supply. We've also seen a surprising spike in jet fuel demand; taking jet fuel inventories down from 61.7 to 45.1 days of supply in just 5 weeks.
The EIA's Wild Ass Guess ("WAG") of U.S. oil production has been at 11 million BOPD for four weeks. They have no way of knowing want it really is. A few more upstream companies are now completing DUC wells and most of the shut-ins are back online, but by the end of July we should see U.S. oil production back on steady decline. There is no way U.S. production can increase with less than 200 active rigs drilling for oil. At least 500 active rigs are needed to hold U.S. production flat.
EIA's detailed petroleum report here: https://www.eia.gov/dnav/pet/pet_sum_sn ... _nus_w.htm
FEAR of COVID-19 shutdowns is the only thing holding down oil prices.
China's oil demand now exceeds what it was pre-COVID and most of the other Asian nations are heading there too. Apparently they aren't watching CNN.
> WTI is down 47c to $40.73/Bbl, and Brent is down 33c to $43.46/Bbl.
> Natural gas is up 1.0c to $1.788/MMBtu.
Closing Prices:
> WTI prompt month (AUG 20) was down $0.45 on the day, to settle at $40.75/Bbl.
> NG prompt month (AUG 20) was down $0.055 on the day, to settle at $1.723/MMBtu.
I'm expecting to see lower crude oil imports by the U.S. each week through the summer as we should finally be past the increased imports caused by the Saudi Arabia vs Russia price war. It took ~3 months for the last of those shipments to arrive. Very little SA crude is now being shipped to the U.S. I'm also expecting a steady increase in refinery utilization. With refiners processing more crude oil, lower imports and depleting U.S. oil production U.S. crude oil inventories should be back to the 5-year range of 25-30 days of supply by the end of the summer. Just in the last five weeks U.S. crude oil inventories have dropped from 40.9 to 37.6 days of supply. Gasoline inventories are already below 30 days of supply. We've also seen a surprising spike in jet fuel demand; taking jet fuel inventories down from 61.7 to 45.1 days of supply in just 5 weeks.
The EIA's Wild Ass Guess ("WAG") of U.S. oil production has been at 11 million BOPD for four weeks. They have no way of knowing want it really is. A few more upstream companies are now completing DUC wells and most of the shut-ins are back online, but by the end of July we should see U.S. oil production back on steady decline. There is no way U.S. production can increase with less than 200 active rigs drilling for oil. At least 500 active rigs are needed to hold U.S. production flat.
EIA's detailed petroleum report here: https://www.eia.gov/dnav/pet/pet_sum_sn ... _nus_w.htm
FEAR of COVID-19 shutdowns is the only thing holding down oil prices.
China's oil demand now exceeds what it was pre-COVID and most of the other Asian nations are heading there too. Apparently they aren't watching CNN.