Oil & Gas Price - Sept 1

[dan_s]

Opening Prices:
> WTI is up 32c to $42.93/Bbl, and Brent is up 44c to $45.72/Bbl.
> Natural gas is down 9.2c to $2.538/MMBtu.

WTI crude gained more than 1% to trade above $43 a barrel on Tuesday shortly after the markets opened, supported by a weaker dollar and prospects of falling US crude stockpiles. The API report is due later in the day and EIA figures on Wednesday but markets anticipate a 2 million drop in US crude inventories last week for a sixth weekly draw. Also, the latest manufacturing PMI for China beat forecasts, powering expectations of higher consumption from China. Still, investors remain concerned about the general fuel demand recovery as the coronavirus pandemic is far from controlled, and infections continue to rise in Europe, the US, and India. Last month, WTI gained near 6%, a fourth straight monthly gain.

The EIA's 941 Report has been updated for June actual oil production. It shows that after dropping from 12,737,000 BOPD in March, U.S. oil production declined to 10,016,000 BOPD in May and rebounded to 10,436,000 BOPD in June. The rebound was due to most shut-ins being restored offset by natural declines. I believe U.S. production did stabilize in July because of more shut-ins coming back online. Production will go on steady decline in August (which will include Hurricane Laura shut-ins) and natural declines will accelerate in September to November. We could see a slight increase in December because some companies will complete more DUC wells in November & December in order to get them into their year-end reserve report. Production always declines in the first quarter because of winter weather and Q1 is the lowest demand period of the year.

BTW EIA's weekly estimates in June were that U.S. oil production averaged 10.9 million bpd, an overstatement of 500,000 bpd. I believe EIA's weekly estimates continue to be too high.

[dan_s]

Closing Prices:
> WTI prompt month (OCT 20) was up $0.15 on the day, to settle at $42.76/Bbl.
> NG prompt month (OCT 20) was down $0.103 on the day, to settle at $2.527/MMBtu.