Energy Prospectus

Opening Prices:
> WTI is up 92c to $43.54/Bbl, and Brent is up 91c to $46.04/Bbl. < October is now the front month NYMEX contract for WTI
> Natural gas is up 1.5c to $2.528/MMBtu.

Closing Prices:
> WTI prompt month (OCT 20) was up $0.73 on the day, to settle at $43.35/Bbl.
> NG prompt month (SEP 20) was down $0.024 on the day, to settle at $2.489/MMBtu. < The NG October contract closed at $2.578/MMBtu.

Video on why natural gas prices are going higher: https://www.youtube.com/watch?v=o_rg_0m ... 0c133ebd48

Natural gas largest source of power generation, but faces challenges . Pennsylvania Business Report .
Natural gas has surpassed coal as the largest source of power generation in the United States, but the industry faces challenges, according to a report by FTI Consulting. Natural gas accounted for 38 percent of the fuel mix in 2019 and several new liquefied natural gas (LNG) export facilities were underway. The United States will be the largest LNG exporter by 2030, according to some analysts’ forecasts.

Natural gas pipeline buildout continues amid pandemic, with 5.0 Bcf/d added in 2020 . NGI .
The Covid-19 pandemic may have dampened energy demand and dented production activity in 2020, but it hasn’t deterred midstream infrastructure buildout in the natural gas industry, an analysis from the Energy Information Administration (EIA) shows. Roughly 5 Bcf/d of natural gas pipeline capacity has entered service so far in 2020, with the new capacity located primarily in the Rockies, the Midcontinent and in the Permian Basin, according to research published Monday by the EIA.

SEB: Oil market tightening. While the market faces potential bearish winds, others see the upside. SEB chief commodities analysts Bjarne Schieldrop sees demand rising, U.S. oil production trending lower and OPEC+ staying the course. Brent has been stuck at $45 per barrel but could soon break free and “we think the direction then is up rather than down,” Schieldrop said.

IHS: Oil demand to plateau below pre-pandemic levels. “Global crude demand surged from May to July with the easing of some COVID-19 restrictions and now rests at 89% of prior-year levels--compared to being at 78% in April,” IHS wrote in a report. “IHS Markit expects demand growth to wane and plateau at 92-95 mbd (or roughly 92-95% of prior-year levels) through the first quarter of 2021.” The reason demand does not bounce back to pre-pandemic levels is because of reduced air travel.

More shale job losses. Pioneer Natural Resources (NYSE: PXD) and Parsley Energy (NYSE: PE) are planning to announce job cuts in the coming days, according to Reuters.

Natural gas prices shoot up. U.S. natural gas prices have climbed to their highest levels since late 2019, pushed higher by ongoing hot weather and absolute declines in production. The tightness is global – JKM prices for LNG could rise to $6/MMBtu by December, according to a report from Bank of America Merrill Lynch. That opens up exports for U.S. LNG again. “The world will call on all US export capacity this winter, in our view,” the bank said.