Energy Prospectus

Opening Prices as of 9am CT:
> WTI oil futures contract for DEC20 is up $0.60 to $40.63.
> HH ngas futures contract for DEC20 is down $0.030 to $3.318

There is strong resistance for WTI at $41.50. Weaker U.S. dollar seems to be providing support at $40.00. I expect WTI to trade in the low $40s through Q1 2021.

The outlook for U.S. natural gas is SIGNIFICANTLY BETTER.
> This has been a cold week with more waves of cold and snow expected in NW quarter of the U.S. Plus, cold weather in Europe.
> Demand for U.S. LNG is expected to keep our exports at max capacity all winter.
> Lower associated gas from the oil plays.
> I highly recommend that you all watch the replay of our October 21 webinar hosted by Range Resources (RRC). You can watch it from our website. Just log on and click on "Luncheon Presentations and Specials".

After listening to our October 21st Webinar....
Range Resources upgraded to Market Perform from Underperform at Raymond James
Raymond James analyst John Freeman upgraded Range Resources to Market Perform from Underperform based on the current commodity strip with both oil and gas "firmly on the upswing." Appalachian drillers have benefited from a nice uptick in gas prices over the last several weeks and "stand to reap further rewards," the analyst said.

Since RRC's Q2 results were released in late July, TipRanks shows that ten analysts have updated their price target for RRC. They range from $5.50 to $14.00. My valuation is $13.50.

New oil and gas price targets from Goldman Sachs Research team:

WTI Oil:
4Q2020: $45.50
2021
Q1: $48.00
Q2: $54.50 < Inline with my view that by May, 2021 OECD oil inventories will be back to normal and heading for a shortage in Q3 2021.
Q3: $60.00
Q4: $61.00

HH natural gas:
4Q2020: $3.00
2021
Q1: $3.50
Q2: $3.25
Q3: $3.25
Q4: $2.92 < This looks like an error in the table to me.

Read more: https://www.zerohedge.com/markets/goldm ... tting-2300

Closing Prices:
> WTI DEC20 closed at $40.61
> Natural gas NOV20 closed at $2.985 and DEC20 closed at $3.259

When there is a big gap between futures contracts from month to month I've seen the next month move lower in the first few days of trading as the front month because shorts roll over their positions. So... we may see DEC20 pull back a bit next week before it drives higher.