Oil & Gas Prices - Dec 3

[dan_s]

Opening Prices:
> WTI is down 18c to $45.10/Bbl, and Brent is down 11c to $48.14/Bbl.
> Natural gas is down 17.2c to $2.608/MMBtu.

Aegis Energy notes at 8:20 AM CT
Crude Oil:

OPEC+ nearing a deal after progress was made during talks between members Saudi Arabia, the UAE, and Russia
OPEC+ is debating whether to continue with the planned output hike scheduled for January or postpone the 1.9 MMBbl/d increase in output
AEGIS notes that even if a deal is announced, it is likely already priced in and will not promote a strong price reaction. In the absence of an agreement or if an inadequate one is reached; it’s possible we could see a response to the downside

S&P Global Platts is considering adding the key U.S. grade oil – WTI Midland – to the Dated Brent Benchmark (S&P)
The move comes only five years after the U.S. ended restrictions on oil exports, reflecting the significance the grade has in global markets, mainly Europe
The U.S. exports 1 MMBbl/d currently, with 443 MBbl/d flowing to Europe to serve as a baseload grade for its refineries, according to Platts

The market received mixed signals from the EIA’s weekly crude stats report
The EIA reported a draw of 679 MBbls for the week ending November 27, in contrast with the average estimate of a 1.9 MMBbl draw as reported by Bloomberg
Crude inventories for the U.S. are now at a surplus of 36.09 MMBbls to last year and a surplus of 27.74 MMBbl to the five-year average
Motor gasoline inventories and distillate inventories increased by 3.5 MMBbl and 3.2 MMBbl, respectively. The surplus to the five-year average increased for both products, as the numbers were much higher than expected after disappointing demand during the holiday week (-25% Y-o-Y) caused inventories to swell

Natural Gas:

Natural gas prices retreat on Thursday morning after weather models show a warmer West and Northeast for mid-December
Some 5.6 HDDs, or about 10-12 Bcf, were lost due to forecast changes over the past 24-hours (CWG)

The EIA is expected to report a 14 Bcf net storage withdrawal later this morning for the week ended November 27
The average analyst estimate is a 14 bcf draw with the high estimate being 1 Bcf and the low at -26 Bcf (Bloomberg)
The estimated withdrawal would be more bearish than what was observed last year and the five-year average