Oil & Gas Prices - Nov 10

[dan_s]

Opening Prices:
> WTI is up 36c to $40.65/Bbl, and Brent is up 44c to $42.84/Bbl.
> Natural gas is up 2.9c to $2.888/MMBtu.

There is strong resistance for WTI at $41.50.
Sub-$50 WTI is an unsustainable oil price because it is not high enough to stop the steady decline of global oil supply. Some upstream companies are going to complete a bunch of DUC wells by mid-December so they will be included in year-end reserve reports (basis for their credit facilities). In Q1 2021 U.S. oil production will go on steady decline since we aren't completing enough wells to offset decline rates of the existing wells. Production almost always declines in Q1 because winter weather hampers well completions and maintenance. There are over a million producing wells in the U.S. and 99% are on decline. Horizontal shale wells have annual decline rates of over 20%.

[dan_s]

https://weather.com/storms/hurricane/ne ... =hp-slot-1

Notes below are from Aegis Energy
After making a three-point turn, Tropical Storm Eta’s forecast has shifted westward toward U.S. offshore GOM platforms
The storm’s severity has dissipated since ravaging Central America, but flooding still caused around $100MM in uninsured losses to Florida
This hurricane season has been one for the record books, with so many storms that the hurricane center used up all the names on the official list. Furthermore, there is a 70% chance another tropical storm may form in the Caribbean in the next five days

Rising demand in China may help offset the demand losses that would occur if another lockdown-type event is imposed in Europe or the U.S. (Bloomberg)
Chinese crude stockpiles peaked at around 914 MMBbls on the week ending October 2, 2020. Since then, 29 MMBbls have been drawn from storage, leaving storage levels at around 885 MMBbls.
The changes in fuel storage were even more pronounced. Gasoline and Diesel inventories have fallen from 71% and 60% of capacity, respectively, since September 4, 2020 to 53.9% and 50% at the end of October

[dan_s]

LONDON (Reuters) - Oil prices will be heading into the high $40 a barrel range or even $50 in the next few months as inventories modestly draw during the winter and this accelerates during the middle of 2021, Vitol Chief Executive Russell Hardy said on Tuesday.

Benchmark Brent crude LCOc1 was trading at almost $43 a barrel on Tuesday.

[dan_s]

Closing Prices;
> WTI prompt month (DEC 20) was up $1.07 on the day, to settle at $41.36/Bbl.
> Also, NG prompt month (DEC 20) was up $0.090 on the day, to settle at $2.949/MMBtu.

If WTI can end the week over $41.50 it could be on its way higher. $41.50 has a been a very strong resistance level.

WTI did move over $41.50 in after hours trading. Go to the website below and watch the short video update from the CME Group technical analysts on the right side of the screen to see what the next resistance level is.
https://www.cmegroup.com/trading/energy ... crude.html