Oil & Gas Prices - Dec 28
Posted: Mon Dec 28, 2020 11:22 am
Opening Prices:
> WTI is up 19c to $48.42/Bbl, and Brent is up 18c to $51.47/Bbl
> Natural gas is down 25.9c to $2.259/MMBtu
Aegis Hedging Solutions morning notes
Crude Oil:
U.S. President Donald Trump signed the $2.3 trillion pandemic aid and spending package on Sunday, December 28 (Reuters)
The President had used a pocket-veto strategy in an attempt to strong-arm Republicans in Congress to increase the stimulus checks to individual Americans from $600 to $2,000; however, the move was ultimately unsuccessful
The President was forced to sign the bill to prevent a government shutdown that would have began on Tuesday
AEGIS notes the stimulus package may support oil prices in the short-term as spending pushes the dollar lower, and consumer demand increase
The amount of crude oil in floating storage rose by 25% week-over-week (Bloomberg)
According to Vortexa, floating crude in storage rose from 80.16 MMBbld on December 18 to 100.4 MMbbls on December 25
The U.S. Gulf Coast saw the largest percentage increase, rising by 513% week-over-week to 2.65 MMBbls, it’s highest since September
Russia officially backs a 500 MBbl/d output hike in February, according to officials familiar with the country’s oil policy (Bloomberg)
On Friday, Russian Oil Minister Novak mentioned that an oil price between $45 and $55 represents an optimum level to allow for recovery of its oil production
A 500 MBbl/d increase would be the maximum allowed by the accord reached by the cartel in early December
The OPEC+ will hold its next online meeting on January 4, 2021, to discuss the cut’s duration
Natural Gas
Prompt-month natural gas has fallen approximately $0.50/MMBtu, since the highs of last week, with the January contract printing around $2.27/MMBtu on its last day of trading
Much of the recent price weakness can be attributed to weather as forecasts continue to run warmer-than-normal during the coldest portions of the winter
According to the Commodity Weather Group, weather models lost almost 36 HDDs since Thursday resulting in the warmest weekend change of winter so far
Panama Canal wait times increase for LNG cargoes bound for Asia
Wait times for unreserved LNG tankers were recorded at an average of 13 days, up from 6 to 8 days in October
The Canal is the fastest route for LNG cargoes departing from the US Gulf Coast to Asia, and the delays come at a time of surging US LNG exports
For the month of December, almost a third of Asian-bound cargoes do not have reservations
Several environmental groups, including the Sierra Club, have filed suits against FERC orders on the Mountain Valley Pipeline
The lawsuits aim at halting progress on the pipeline, which is 92% complete and runs 300 miles through West Virginia and Virginia
The 2 Bcf/d pipeline project’s in-service date has been pushed out to the second half of 2021, according to the company
Gazprom’s Nord Stream 2 pipeline is nearing completion, according to Russian Minister of Energy, Alexander Novak
“Any kind of sanctions will have a negative effect on the implementation of commercial projects, but the work on launching the Nord Stream 2 gas pipeline needs to be continued… As there are such measures, we will continue to work as we have been operating under such conditions for a long time.”
> WTI is up 19c to $48.42/Bbl, and Brent is up 18c to $51.47/Bbl
> Natural gas is down 25.9c to $2.259/MMBtu
Aegis Hedging Solutions morning notes
Crude Oil:
U.S. President Donald Trump signed the $2.3 trillion pandemic aid and spending package on Sunday, December 28 (Reuters)
The President had used a pocket-veto strategy in an attempt to strong-arm Republicans in Congress to increase the stimulus checks to individual Americans from $600 to $2,000; however, the move was ultimately unsuccessful
The President was forced to sign the bill to prevent a government shutdown that would have began on Tuesday
AEGIS notes the stimulus package may support oil prices in the short-term as spending pushes the dollar lower, and consumer demand increase
The amount of crude oil in floating storage rose by 25% week-over-week (Bloomberg)
According to Vortexa, floating crude in storage rose from 80.16 MMBbld on December 18 to 100.4 MMbbls on December 25
The U.S. Gulf Coast saw the largest percentage increase, rising by 513% week-over-week to 2.65 MMBbls, it’s highest since September
Russia officially backs a 500 MBbl/d output hike in February, according to officials familiar with the country’s oil policy (Bloomberg)
On Friday, Russian Oil Minister Novak mentioned that an oil price between $45 and $55 represents an optimum level to allow for recovery of its oil production
A 500 MBbl/d increase would be the maximum allowed by the accord reached by the cartel in early December
The OPEC+ will hold its next online meeting on January 4, 2021, to discuss the cut’s duration
Natural Gas
Prompt-month natural gas has fallen approximately $0.50/MMBtu, since the highs of last week, with the January contract printing around $2.27/MMBtu on its last day of trading
Much of the recent price weakness can be attributed to weather as forecasts continue to run warmer-than-normal during the coldest portions of the winter
According to the Commodity Weather Group, weather models lost almost 36 HDDs since Thursday resulting in the warmest weekend change of winter so far
Panama Canal wait times increase for LNG cargoes bound for Asia
Wait times for unreserved LNG tankers were recorded at an average of 13 days, up from 6 to 8 days in October
The Canal is the fastest route for LNG cargoes departing from the US Gulf Coast to Asia, and the delays come at a time of surging US LNG exports
For the month of December, almost a third of Asian-bound cargoes do not have reservations
Several environmental groups, including the Sierra Club, have filed suits against FERC orders on the Mountain Valley Pipeline
The lawsuits aim at halting progress on the pipeline, which is 92% complete and runs 300 miles through West Virginia and Virginia
The 2 Bcf/d pipeline project’s in-service date has been pushed out to the second half of 2021, according to the company
Gazprom’s Nord Stream 2 pipeline is nearing completion, according to Russian Minister of Energy, Alexander Novak
“Any kind of sanctions will have a negative effect on the implementation of commercial projects, but the work on launching the Nord Stream 2 gas pipeline needs to be continued… As there are such measures, we will continue to work as we have been operating under such conditions for a long time.”