Energy Prospectus

Opening Prices for JAN21 NYMEX Contracts:
> WTI is down 14c to $45.39/Bbl, and Brent is down 41c to $47.77/Bbl.
> Natural gas is up 7.9c to $2.922/MMBtu.

Aegis Energy morning notes:
Crude Oil

OPEC+ members to begin formal talks on extending oil cuts or increasing output
> The group met on Sunday but failed to reach an agreement prior to Monday’s formal talks
> The group is set to ease production cuts by 2 MMBbl/d starting in January; however, the decision has been complicated by rising Libyan output and an increase in coronavirus infections
> OPEC+ members Kazakhstan and the UAE have expressed concerns about extending the oil cuts, according to Reuters

Goldman Sachs: Oil may reach $65/Bbl in 2021 as an inflection point is reached in 2H2021
> The market will be supported by a vaccine-led rebound in demand, and a “modest” non-OPEC supply response
> The price forecast is contingent on an extension of the OPEC+ output cuts. If the cuts are not extended, Goldman foresees $5/Bbl in downside from current levels
> The Baker Hughes oil rig count gained 10 rigs to bring the total oil rig count to 241 < We need at least 600 rigs drilling for oil to halt the decline in U.S. oil production.
> The major basins, Permian, Eagle Ford, and Denver-Julesburg, added five, three, and one rig, respectively

Natural Gas:

After this morning’s rise, natural gas for January is close to $3.00 MMBtu once again
> In the mid-$2.90’s, January is up over 30c from just 11 days ago, but still about 40c from its high of $3.35 on Oct. 30
> Weather models showed an overall cooler shift in the Lower 48, most in the west for the 6-10 day window and southeast and east for the 11-12 day time-period
> A total of 3.7 HDDs, or about 7 Bcf, was gained from Friday to Monday, according to Commodity Weather Group

The Nord Stream 2 pipeline, led by Gazprom, is set to resume pipe-laying work in German waters sometime between Dec. 5 and Dec. 31, according to a notice to sea-farers (S&P)
> The 765-mile pipeline under the Baltic Sea only lacks about 75 miles in German and Danish waters to be complete (Pgjonline)
> U.S. sanctions against pipeline vessels operated by Swiss-Dutch Allseas halted work last December
> Nord Stream 2 is seen as a threat to LNG imports into Europe as more piped gas will reach Germany, and thereby other parts of Europe, from Russia

Great news!

The first two vaccines against the novel coronavirus could be available to Americans before Christmas, Health Secretary Alex Azar said on Monday, after Moderna Inc became the second vaccine maker likely to receive U.S. emergency authorization.

The Food and Drug Administration's outside advisers will meet on Dec. 10 to consider authorizing Pfizer Inc's COVID-19 vaccine. That vaccine could be approved and shipped within days, with Moderna's following one week behind that, Azar said.

"So we could be seeing both of these vaccines out and getting into people's arms before Christmas," Azar said on CBS' "This Morning."

The federal government will ship the vaccines through its normal vaccine distribution system, with state governors determining where they should go first, Azar said.

Closing Prices:
> WTI prompt month (JAN 21) was down $0.19 on the day, to settle at $45.34/Bbl. < No decision yet from OPEC+
> In contrast, NG prompt month (JAN 21) was up $0.039 on the day, to settle at $2.882/MMBtu. < We should see a triple digit draw from storage the week ending December 4.